---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

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

For the Quarterly Period ended March 31, 2006

Commission File No. 033-28188

|Small Business Issuer:                  | Strategic Internet Investments, Incorporated
|--------------------------------------- | --------------------------------------------
|                                        |                                             
|State of incorporation:                 | Delaware                                    
|                                        |                                             
|IRS Employer Identification:            | 84-1116458                                  
|                                        |                                             
|Address of principal executive offices: | Suite 250, 1090 West Georgia Street         
|                                        | Vancouver, BC                               
|                                        | Canada V6E 3V7                              
|                                        |                                             
|Issuers telephone number               | 604-684-8662                                

|Check whether the issuer (1) filed all reports required
      to be filed bySection 13 or 15(d) of the Exchange Act during the
      past 12 months,and (2) has been subject to such filing
      requirements for the past 90days. |            | Yes | ( X ) | No | ()   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | --- | ----- | -- | -----
|                                                                                                                                                                                                                                    |            |     |       |    |      
|Indicate by check mark whether the registrant is a shell
      company (asdefined in Rule 12b-2 of the Exchange Act).                                                                                                               |            | Yes | ( X ) | No | ()   
|                                                                                                                                                                                                                                    |            |     |       |    |      
|                                                                                                                                                                                                                                    |            |     |       |    |      
|Common shares outstanding as of April 30, 2006:                                                                                                                                                                                     | 25,660,326 |     |       |    |      
|                                                                                                                                                                                                                                    |            |     |       |    |      
|                                                                                                                                                                                                                                    |            |     |       |    |      
|Transitional Small Business Disclosure Format.                                                                                                                                                                                      |            | Yes | (   ) | No | ( X )

PART I  FINANCIAL INFORMATION

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

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

---

1. Financial Statements

STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(Stated in U.S. Dollars)

(Unaudited)

---

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

|                                                            |   | March
      31, |   |   | December 31, |  
|----------------------------------------------------------- | - | --------------- | - | - | ------------ | -
|                                                            |   | 2006            |   |   | 2005         |  
|                                                            |   |                 |   |   |              |  
|ASSETS                                                      |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Cash                                                        | $ | 547             |   | $ | 581          |  
|Prepaid expenses                                            |   | 91,667          |   |   | 141,667      |  
|                                                            |   |                 |   |   |              |  
|                                                            |   | 92,214          |   |   | 142,248      |  
|                                                            |   |                 |   |   |              |  
|Equipment                                                   |   | 1,481           |   |   | 1,601        |  
|Deferred investment costs  Notes 3, 5 and 7                |   | 1               |   |   | 1            |  
|                                                            |   |                 |   |   |              |  
|                                                            | $ | 93,696          |   | $ | 143,850      |  
|                                                            |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|LIABILITIES                                                 |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Accounts payable
       Note 7                             | $ | 119,114         |   | $ | 108,022      |  
|Due to related parties  Note
      7                       |   | 56,024          |   |   | 50,991       |  
|Loans payable  Notes 4
      and 8                         |   | 217,795         |   |   | 199,304      |  
|                                                            |   |                 |   |   |              |  
|                                                            |   | 392,933         |   |   | 358,317      |  
|                                                            |   |                 |   |   |              |  
|STOCKHOLDERS DEFICIENCY                                    |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Capital Stock  Notes 5 and 8                               |   |                 |   |   |              |  
|Class A Convertible Preferred stock,
      $0.001 par value |   |                 |   |   |              |  
|10,000,000
      authorized, 198,000 outstanding            |   | 198             |   |   | 198          |  
|Class B Preferred stock, $0.001
      par value             |   |                 |   |   |              |  
|10,000,000
      authorized, none outstanding               |   |                 |   |   |              |  
|Common stock, $0.001 par value                              |   |                 |   |   |              |  
|100,000,000
      authorized                                |   |                 |   |   |              |  
|25,660,326
      outstanding (2005: 25,660,326 outstanding) |   | 25,659          |   |   | 25,659       |  
|Additional paid-in capital                                  |   | 7,720,356       |   |   | 7,720,356    |  
|Deficit accumulated
      during the development stage      |   | (8,045,450      | ) |   | (7,960,680   | )
|                                                            |   |                 |   |   |              |  
|                                                            |   | (299,237        | ) |   | (214,467     | )
|                                                            |   |                 |   |   |              |  
|                                                            | $ | 93,696          |   | $ | 143,850      |  

SEE ACCOMPANYING NOTES

---

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

|                                      |   |                    |   |   |                  |   |   | Cumulative     |  
|------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | -------------- | -
|                                      |   |                    |   |   |                  |   |   | from February  |  
|                                      |   |                    |   |   |                  |   |   | 28, 1989 (Date |  
|                                      |   | Three months ended |   |   | of Inception) to |  
|                                      |   | March 31,          |   |   | March
      31,  |  
|                                      |   | 2006               |   |   | 2005             |   |   | 2006           |  
|                                      |   |                    |   |   |                  |   |   |                |  
|General and Administrative Expenses   |   |                    |   |   |                  |   |   |                |  
|Accounting and audit
      fees       | $ | 9,825              |   | $ | 17,184           |   | $ | 177,172        |  
|Amortization                          |   | 120                |   |   | 171              |   |   | 3,616          |  
|Automobile                            |   | -                  |   |   | -                |   |   | 565            |  
|Business Promotion                    |   | -                  |   |   | -                |   |   | 213            |  
|Communications                        |   | 1,605              |   |   | 2,610            |   |   | 97,745         |  
|Consulting fees  Note 7              |   | 56,498             |   |   | 50,563           |   |   | 2,321,370      |  
|Interest 
      Note 7               |   | 3,745              |   |   | 9,761            |   |   | 75,710         |  
|Investor relations                    |   | -                  |   |   | 6,174            |   |   | 91,385         |  
|Legal fees                            |   | 4,852              |   |   | 13,805           |   |   | 154,419        |  
|Management fees  Note 7              |   | 2,491              |   |   | -                |   |   | 155,863        |  
|Office and general
       Note 7     |   | 516                |   |   | 708              |   |   | 137,867        |  
|Regulatory fees                       |   | 335                |   |   | 178              |   |   | 19,015         |  
|Rent  Note
      8                   |   | 5,198              |   |   | 4,892            |   |   | 79,775         |  
|Transfer agent fees                   |   | 375                |   |   | 7,579            |   |   | 38,357         |  
|Travel                                |   | -                  |   |   | 15,637           |   |   | 103,478        |  
|Non-cash compensation charge  Note 5 |   | -                  |   |   | 13,100           |   |   | 455,735        |  
|                                      |   |                    |   |   |                  |   |   |                |  
|Loss before the following:            |   | (85,560            | ) |   | (142,362         | ) |   | (3,912,285     | )
|                                      |   |                    |   |   |                  |   |   |                |  
|Unauthorized distribution             |   | -                  |   |   | -                |   |   | (69,116        | )
|Termination fee
       Note 6        |   | -                  |   |   | -                |   |   | (792,000       | )
|Gain (loss) on foreign exchange       |   | 790                |   |   | (530             | ) |   | (7,549         | )
|Gain on settlement
      of debt      |   | -                  |   |   | -                |   |   | 15,464         |  
|Write-down of deferred investment     |   |                    |   |   |                  |   |   |                |  
|costs
       Note 3                  |   | -                  |   |   | -                |   |   | (34,209        | )
|Write-down of advances to             |   |                    |   |   |                  |   |   |                |  
|related
      party                   |   | -                  |   |   | -                |   |   | (606,337       | )
|                                      |   |                    |   |   |                  |   |   |                |  
|Net loss for the period               | $ | (84,770            | ) | $ | (142,892         | ) | $ | (5,406,032     | )
|                                      |   |                    |   |   |                  |   |   |                |  
|Basic loss per share                  | $ | (0.00              | ) | $ | (0.01            | ) |   |                |  
|                                      |   |                    |   |   |                  |   |   |                |  
|Weighted average number of common     |   |                    |   |   |                  |   |   |                |  
|shares outstanding                    |   | 25,660,326         |   |   | 21,092,761       |   |   |                |  

SEE ACCOMPANYING NOTES

---

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

|                                                          |  |                    |   |   |                        |   |   | Cumulative from   |  
|--------------------------------------------------------- |  | ------------------ | - | - | ---------------------- | - | - | ----------------- | -
|                                                          |  |                    |   |   |                        |   |   | February 28, 1989 |  
|                                                          |  | Three months ended |   |   | (Date of Inception) to |  
|                                                          |  | March 31,          |   |   | March 31,              |  
|                                                          |  | 2006               |   |   | 2005                   |   |   | 2006              |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Operating Activities                                      |  |                    |   |   |                        |   |   |                   |  
|Net loss for the period                                   |  | (84,770            | ) | $ | (142,892               | ) | $ | (5,406,032        | )
|Adjustments to reconcile net loss to net
      cash used  |  |                    |   |   |                        |   |   |                   |  
|in
      operating activities:                            |  |                    |   |   |                        |   |   |                   |  
|Amortization                                              |  | 120                |   |   | 171                    |   |   | 3,616             |  
|Communications                                            |  | -                  |   |   | -                      |   |   | 28,000            |  
|Consulting
      fees                                     |  | 50,000             |   |   | 44,562                 |   |   | 2,194,887         |  
|Gain on settlement of debt                                |  | -                  |   |   | -                      |   |   | (15,464           | )
|Legal
      fees                                          |  | -                  |   |   | 6,545                  |   |   | 25,000            |  
|Management fees                                           |  | -                  |   |   | -                      |   |   | 7,000             |  
|Write-down
      of advances to related party             |  | -                  |   |   | -                      |   |   | 606,337           |  
|Write-down of deferred investment costs                   |  | -                  |   |   | -                      |   |   | 34,209            |  
|Non-cash
      compensation charge                        |  | -                  |   |   | 13,100                 |   |   | 455,735           |  
|Termination fees                                          |  | -                  |   |   | -                      |   |   | 792,000           |  
|Changes in non-cash items:                                |  |                    |   |   |                        |   |   |                   |  
|Prepaid expenses                                          |  | -                  |   |   | (1,572                 | ) |   | -                 |  
|Accounts payable                                          |  | 11,092             |   |   | 16,717                 |   |   | 272,584           |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Net cash provided
      by (used in) operating activities |  | (23,558            | ) |   | (63,369                | ) |   | (1,002,128        | )
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Investing Activities                                      |  |                    |   |   |                        |   |   |                   |  
|Organization costs                                        |  | -                  |   |   | -                      |   |   | (750              | )
|Acquisition of capital assets                             |  | -                  |   |   | -                      |   |   | (4,347            | )
|Deferred investment costs                                 |  | -                  |   |   | -                      |   |   | (34,210           | )
|Due to/from related parties, net                          |  | 5,033              |   |   | 4,792                  |   |   | 56,024            |  
|Advances to related party                                 |  | -                  |   |   | -                      |   |   | (606,337          | )
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Net cash used in investing activities                     |  | 5,033              |   |   | 4,792                  |   |   | (589,620          | )
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Financing Activities                                      |  |                    |   |   |                        |   |   |                   |  
|Loans payable                                             |  | 18,491             |   |   | (3,146                 | ) |   | 561,492           |  
|Proceeds from issuance
      of common stock              |  | -                  |   |   | 41,083                 |   |   | 1,032,631         |  
|Payment of offering costs                                 |  | -                  |   |   | -                      |   |   | (27,270           | )
|Additional paid-in capital                                |  | -                  |   |   | -                      |   |   | 25,442            |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Net cash provided in financing activities                 |  | 18,491             |   |   | 37,937                 |   |   | 1,592,295         |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Increase (decrease) in cash during the
      period       |  | (34                | ) |   | (20,640                | ) |   | 547               |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Cash, beginning of the period                             |  | 581                |   |   | 22,987                 |   |   | -                 |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Cash, end of the period                                   |  | 547                |   | $ | 2,347                  |   | $ | 547               |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Supplementary disclosure of cash
      flows:             |  |                    |   |   |                        |   |   |                   |  
|Cash
      paid for Interest                              |  | -                  |   | $ | -                      |   | $ | 17,054            |  
|                                                          |  |                    |   |   |                        |   |   |                   |  
|Non-cash Transactions  Note 6                            |  |                    |   |   |                        |   |   |                   |  

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY                
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2006
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

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

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY                
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2006
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  | Deficit     |   |  |          |  
|----------------------------------- |  | --------------- |  |  | --------------- |  |  | --------- |  |  | --------------- |  |  | ---------- | - |  | ----------- | - |  | -------- | -
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  | Accumulated |   |  |          |  
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  | Additional |   |  | During the  |   |  |          |  
|                                    |  | Preferred Stock |  |  | Common Stock    |  |  | Paid-In   |  |  | Development     |  |  |            |  
|                                    |  | Shares          |  |  | Par
      Value |  |  | Shares    |  |  | Par
      Value |  |  | Capital    |   |  | Stage       |   |  | Total    |  
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1995          |  | -               |  |  | -               |  |  | 116,695   |  |  | 116             |  |  | 108,956    |   |  | (110,500    | ) |  | (1,428   | )
|Net loss                            |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | -          |   |  | (9,068      | ) |  | (9,068   | )
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|Balance December 31, 1996           |  | -               |  |  | -               |  |  | 116,895   |  |  | 116             |  |  | 108,956    |   |  | (119,568    | ) |  | (10,496  | )
|Issuance of stock for cash - $0.011 |  | -               |  |  | -               |  |  | 2,000,000 |  |  | 2,000           |  |  | 19,300     |   |  | -           |   |  | 21,300   |  
|Contributed capital                 |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | 600        |   |  | -           |   |  | 600      |  
|Net loss                            |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | -          |   |  | (22,261     | ) |  | (22,261  | )
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1997          |  | -               |  |  | -               |  |  | 2,116,695 |  |  | 2,116           |  |  | 128,856    |   |  | (141,829    | ) |  | (10,857  | )
|Issuance of stock services          |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|- at $0.001                         |  | -               |  |  | -               |  |  | 7,000,000 |  |  | 7,000           |  |  | -          |   |  | -           |   |  | 7,000    |  
|- at $0.01                          |  | -               |  |  | -               |  |  | 620,000   |  |  | 620             |  |  | 5,580      |   |  | -           |   |  | 6,200    |  
|Net loss                            |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | -          |   |  | (52,308     | ) |  | (52,308  | )
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1998          |  | -               |  |  | -               |  |  | 9,736,695 |  |  | 9,736           |  |  | 134,436    |   |  | (194,137    | ) |  | (49,965  | )
|Net loss                            |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | -          |   |  | (35,995     | ) |  | (35,995  | )
|                                    |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1999          |  | -               |  |  | -               |  |  | 9,736,695 |  |  | 9,736           |  |  | 134,436    |   |  | (230,132    | ) |  | (85,960  | )
|Issuance of stock for cash          |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
|pursuant to a private placement     |  |                 |  |  |                 |  |  |           |  |  |                 |  |  |            |   |  |             |   |  |          |  
| at $0.30                          |  | -               |  |  | -               |  |  | 1,133,334 |  |  | 1,133           |  |  | 338,867    |   |  | -           |   |  | 340,000  |  
|Issue of stock for finders fee      |  | -               |  |  | -               |  |  | 50,000    |  |  | 50              |  |  | (50        | ) |  | -           |   |  | -        |  
|Net loss                            |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | -          |   |  | (336,431    | ) |  | (336,431 | )
|Non-cash
      compensation charge  |  | -               |  |  | -               |  |  | -         |  |  | -               |  |  | 78,707     |   |  | -           |   |  | 78,707   |  

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY                
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2006
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

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

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY                
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2006
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

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

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS
      DEFICIENCY                
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2006
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   | Deficit     |   |   |          |  
|-------------------------------------------------------------------- |  | --------------- |  | - | --------------- |  |  | ---------- |  | - | --------------- |  | - | ---------- |  | - | ----------- | - | - | -------- | -
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   | Accumulated |   |   |          |  
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   | Additional |  |   | During the  |   |   |          |  
|                                                                     |  | Preferred Stock |  |   | Common Stock    |  |  | Paid-In    |  |   | Development     |  |   |            | 
|                                                                     |  | Shares          |  |   | Par
      Value |  |  | Shares     |  |   | Par
      Value |  |   | Capital    |  |   | Stage       |   |   | Total    |  
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   |             |   |   |          |  
|Balance, December 31, 2004                                           |  | 198,000         |  | $ | 198             |  |  | 18,972,675 |  | $ | 18,971          |  | $ | 4,348,913  |  | $ | (4,803,992  | ) | $ | (435,910 | )
|Non-cash compensation charge                                         |  | -               |  |   | -               |  |  | -          |  |   | -               |  |   | 25,700     |  |   | -           |   |   | 25,700   |  
|Issue of stock for cash
      pursuant to the exercise               |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   |             |   |   |          |  
|of share purchase warrants           
               at $0.07       |  | -               |  |   | -               |  |  | 75,820     |  |   | 76              |  |   | 5,232      |  |   | -           |   |   | 5,308    |  
| at $0.10                                                           |  | -               |  |   | -               |  |  | 357,760    |  |   | 357             |  |   | 35,418     |  |   | -           |   |   | 35,775   |  
| at $0.11                                                           |  | -               |  |   | -               |  |  | 299,724    |  |   | 300             |  |   | 31,270     |  |   | -           |   |   | 31,570   |  
| at $0.21                                                           |  | -               |  |   | -               |  |  | 16,803     |  |   | 17              |  |   | 3,483      |  |   | -           |   |   | 3,500    |  
|Issue of stock for debt                            
       at $0.39 |  | -               |  |   | -               |  |  | 635,901    |  |   | 636             |  |   | 249,524    |  |   | -           |   |   | 250,160  |  
|Issuance of stock for services                   
       at $0.25   |  | -               |  |   | -               |  |  | 950,000    |  |   | 950             |  |   | 236,550    |  |   | -           |   |   | 237,500  |  
| at $0.36                                                           |  | -               |  |   | -               |  |  | 100,000    |  |   | 100             |  |   | 35,900     |  |   | -           |   |   | 36,000   |  
| at $0.50                                                           |  | -               |  |   | -               |  |  | 121,000    |  |   | 121             |  |   | 60,379     |  |   | -           |   |   | 60,500   |  
| at $0.54                                                           |  | -               |  |   | -               |  |  | 20,000     |  |   | 20              |  |   | 10,680     |  |   | -           |   |   | 10,700   |  
| at $0.84                                                           |  | -               |  |   | -               |  |  | 50,000     |  |   | 50              |  |   | 41,950     |  |   | -           |   |   | 42,000   |  
|Issuance of stock dividend                      
       at $0.65    |  | -               |  |   | -               |  |  | 4,060,643  |  |   | 4,061           |  |   | 2,635,357  |  |   | (2,639,418  | ) |   | -        |  
|Net loss                                                             |  | -               |  |   | -               |  |  | -          |  |   | -               |  |   | -          |  |   | (517,270    | ) |   | (517,270 | )
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   |             |   |   |          |  
|Balance, December 31, 2005                                           |  | 198,000         |  |   | 198             |  |  | 25,660,326 |  |   | 25,659          |  |   | 7,720,356  |  |   | (7,960,680  | ) |   | (214,467 | )
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   |             |   |   |          |  
|Net loss                                                             |  | -               |  |   | -               |  |  | -          |  |   | -               |  |   | -          |  |   | (84,770     | ) |   | (84,770  | )
|                                                                     |  |                 |  |   |                 |  |  |            |  |   |                 |  |   |            |  |   |             |   |   |          |  
|Balance, March 31, 2006                                              |  | 198,000         |  | $ | 198             |  |  | 25,660,326 |  | $ | 25,659          |  | $ | 7,720,356  |  | $ | (8,045,450  | ) | $ | (299,237 | )

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|1. | Interim Reporting and Continuance of
    Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company is in the development stage and is devoting
      its efforts to developing The Dream Island Resort project in Manama,
      Bahrain. The Dream Island Resort project will be an integrated resort,
      entertainment, hotel and real estate facility to be built on a 41 acre
      man-made island off the north eastern coast of Manama, Bahrain (Note
      5).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The accompanying unaudited interim financial statements
      have been prepared by Strategic Internet Investments, Incorporated (the
      Company) pursuant to the rules and regulations of the United States
      Securities and Exchange Commission. Certain information and disclosures
      normally included in annual financial statements prepared in accordance
      with accounting principles generally accepted in the United States of
      America have been condensed or omitted pursuant to such rules and
      regulations. In the opinion of management, all adjustments and disclosures
      necessary for a fair presentation of these financial statements have been
      included. Such adjustments consist of normal recurring adjustments. These
      interim financial statements should be read in conjunction with the annual
      audited financial statements of the Company for the fiscal year ended
      December 31, 2005, as filed with the United States Securities and Exchange
      Commission.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The results of operations for the three months ended
      March 31, 2006 are not indicative of the results that may be expected for
      the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next fiscal year.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At March 31, 2006, the Company had not yet achieved profitable
      operations, has accumulated losses of $8,045,450 since its inception, has
      a working capital deficiency of $300,719 and expects to incur further
      losses in the development of its business, all of which casts substantial
      doubt about the Companys ability to continue as a going concern. The
      Companys ability to continue as a going concern is dependent upon its
      ability to generate future profitable operations and/or to obtain the
      necessary financing to meet its obligations and repay its liabilities
      arising from normal business operations when they come due. Management has
      no formal plan in place to address this concern but considers that the
      Company will be able to obtain additional funds by equity financing and/or
      related party advances, however there is no assurance of additional
      funding being available. The Company has historically satisfied its
      capital needs primarily by issuing equity securities. Management plans to
      continue to provide for its capital needs during the year ended December
      31, 2006 by issuing equity securities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|1. | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | These interim consolidated financial statements included
      the accounts of the Company and its wholly-owned subsidiaries Strategic
      Internet Investment Canada Inc. and 3851630 Canada Inc. Both of these
      subsidiary companies are dormant and were incorporated by the Company in
      March 2001. All significant inter-company transactions were
    eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | Deferred Investment Costs Note 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Deferred investment costs consist of consultants fees
      and payments to reimburse Star Leisure and Entertainment Inc. with respect
      to the acquisition of Gulf Star World Development W.L.L., net of a
      write-down to a nominal value of $1.00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

1

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|3. | Loans Payable  Note 8
|-- | ----------------------

| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   | March
      31, |  |   | December
      31, | 
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------------- |  | - | ------------------ | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   | 2006            |  |   | 2005               | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| | a) | Loan payable to a company controlled by a
      director of the Company including accrued interest of $844 (December 31,
      2005: $406) The loan is unsecured, bearing interest at 12% per annum and
      is repayable on demand.                                                                                                                                  |  | $ | 7,645           |  | $ | 7,426              | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| | b) | Loan payable to a shareholder including accrued
      interest of $3,562 (December 31, 2005: $3,376 ). The loan is unsecured,
      bears interest at 8% per annum and is repayable upon demand.                                                                                                                                                                       |  |   | 9,597           |  |   | 9,411              | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| | c) | Loans payable to companies controlled by
      directors of the Company. The loans are unsecured, non-interest bearing,
      repayable upon demand, in Canadian funds in the amount of Cdn$69,411.                                                                                                                                                                    |  |   | 59,430          |  |   | 44,638             | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| | d) | Loan payable to a company controlled by a
      director of the Company including accrued interest of $902 (December 31,
      2005: $732) The loan is unsecured, bearing interest at 10% per annum and
      is repayable upon demand. This loan and accrued interest is payable in Canadian
      funds in the amount of Cdn$11,274.                                 |  |   | 9,653           |  |   | 9,522              | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| | e) | Loans
      payable to a company controlled by a director of the Company, including
      accrued interest of $28,264 (December 31, 2005: $25,100 ), pursuant to Convertible
      Loan Agreements. Interest is calculated at 10% per annum and is repayable
      upon demand. The lenders rights to convert this loan into units of
      the Company have expired. |  |   | 131,470         |  |   | 128,307            | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  |   |                 |  |   |                    | 
| |    |                                                                                                                                                                                                                                                                                                                                                                        |  | $ | 217,795         |  | $ | 199,304            | 

|4. | Capital Stock Note 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Class A Convertible Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Class A convertible preferred shares have a par value
      of $0.001 and are convertible to common shares at $4.00 per share during
      the first 180 days following issuance, and thereafter at the average of
      twenty consecutive days closing prices, but shall not be less than $1.50
      per share or greater than $6.00 per share. The Company has the right to
      redeem its Class A convertible preferred stock at any time by paying to
      the holders thereof the sum of $4 per share.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys board of directors approved a stock option
      plan. Under the plan directors, employees and consultants may be granted
      options to purchase common stock of the Company at a price of not less
      than 100% of the fair market value of the stock. The total number of
      options granted must not exceed 15% of the outstanding common stock of the
      Company. The plan expires on July 1, 2017.                                                                                   

2

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|5. | Capital Stock Note 8  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company granted share purchase options to directors,
      employees, and consultants of the Company at the closing price of the
      Companys common stock on the date of the grants. The options have been
      granted with a term of 5 years. The stock options are exercisable at 20%
      on the date of grant, and then 20% every three months thereafter, such
      that they are fully exercisable after a period of one year from the date
      of grant.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the period ended March 31, 2006, the share
      purchase options outstanding are as follows:                                                                                                                                                                                                                                                                                                                                                                         

| |                                             |                    |           | Weighted      
| | ------------------------------------------- | ------------------ | --------- | --------------
| |                                             |                    |           | Average       
| |                                             | Expiry             | Shares    | Exercise Price
| |                                             |                    |           |               
| |                                             | September 5, 2008  | 1,752,000 | $0.21         
| |                                             | February 5, 2009   | 120,000   | $0.29         
| |                                             | April 15, 2009     | 30,000    | $0.53         
| |                                             | July 8,
      2009 | 108,000   | $0.33         
| |                                             |                    |           |               
| | Options
      outstanding at March 31, 2006 | 2,010,000          | $0.22    

| | At March 31, 2006, all of the outstanding share purchase
      options were exercisable.                                                                                                                                                                            
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                     
| | As no options were granted during the period ending March
      31, 2006, the total non-cash compensation charge determined is NIL (2005 -
      NIL). The stock options have a graded vesting schedule, the total
      compensation cost recognized is as follows:

| |                                                            |  |                    |  |   |               |   |   | Cumulative
      from |  
| | ---------------------------------------------------------- |  | ------------------ |  | - | ------------- | - | - | --------------------- | -
| |                                                            |  |                    |  |   |               |   |   | February 28,          |  
| |                                                            |  |                    |  |   |               |   |   | 1989  (Date of        |  
| |                                                            |  | Three months ended |  |   | Inception) to |  
| |                                                            |  | March 31,          |  |   | March 31,     |  
| |                                                            |  | 2006               |  |   | 2005          |   |   | 2006                  |  
| |                                                            |  |                    |  |   |               |   |   |                       |  
| | Total non-cash compensation charge vested                  |  | -                  |  | $ | 15,900        |   | $ | 955,657               |  
| | Employees
      non-cash compensation charge              |  | -                  |  |   | (2,800        | ) |   | (499,922              | )
| |                                                            |  |                    |  |   |               |   |   |                       |  
| | Consultants
      non-cash compensation charge recognized |  | -                  |  | $ | 13,100        |   | $ | 455,735               |  

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:

3

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|5. | Capital Stock Note 8 (contd)
      Commitments  (contd)
      Stock-based Compensation 
(contd)
|-- | -----------------------------------------------------------------------------------------------------

| |                                    |   |                    |   |   |                     |   |   | Cumulative from   |  
| | ---------------------------------- | - | ------------------ | - | - | ------------------- | - | - | ----------------- | -
| |                                    |   |                    |   |   |                     |   |   | February 28, 1989 |  
| |                                    |   | Three months ended |   |   | (Date of Inception) |  
| |                                    |   | March 31,          |   |   | to March 31,        |  
| |                                    |   | 2006               |   |   | 2005                |   |   | 2006              |  
| |                                    |   |                    |   |   |                     |   |   |                   |  
| | Net loss  as reported             | $ | (84,770            | ) | $ | (159,059            | ) | $ | (5,406,032        | )
| |                                    |   |                    |   |   |                     |   |   |                   |  
| | Net loss  pro-forma               | $ | (84,770            | ) | $ | (161,859            | ) | $ | (5,905,954        | )
| |                                    |   |                    |   |   |                     |   |   |                   |  
| | Basic loss per share  as reported | $ | (0.00              | ) | $ | (0.01               | ) |   |                   |  
| |                                    |   |                    |   |   |                     |   |   |                   |  
| | Basic loss per share  pro-forma   | $ | (0.00              | ) | $ | (0.01               | ) |   |                   |  

| | The fair value of each option grant was estimated on the
      date of the grant using the Black-Scholes option pricing model. The
      Black-Scholes option pricing model requires the input of highly subjective
      assumptions including the expected price volatility. Changes in the
      subjective input assumptions can materially affect the fair value estimate
      and therefore the Black-Scholes model does not necessarily provide a
      reliable single measure of the fair value of the Companys share purchase
      options.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | Share Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | At March 31, 2006, the following share purchase
      warrants were outstanding:                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | Number of Warrants | Exercise Price | Expiry Date      
| | ------------------ | -------------- | -----------------
| |                    |                |                  
| | 43,500             | $0.25          | April 1, 2006    
| | 10,126             | $0.50          | May 1, 2006      
| | 55,264             | $0.63          | May 1, 2006      
| | 22,500             | $0.67          | June 1, 2006     
| | 131,507            | $0.61          | July 1, 2006     
| | 8,824              | $0.57          | July 1, 2006     
| | 26,939             | $0.41          | September 1, 2006
| | 21,510             | $0.44          | October 1, 2006  
| | 96,047             | $0.24          | January 31, 2007 
| |                    |                |                  
| | 416,217            |                |                  

Each warrant entitles the holder
thereof the right to purchase one common share at the prices as indicated
above.

4

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Acquisition of Gulf Star World Development
  W.L.L.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | By a letter of agreement dated July 11, 2002, amended
      October 10, 2002, May 10, 2003 and September 30, 2003, and June 30, 2004
      and July 11, 2005, the Company agreed to purchase 80% of the outstanding
      shares of Gulf Star World Development W.L.L. (Gulf Star), a Bahrain
      corporation, from Star Leisure & Entertainment Inc. (Star Leisure).
      Star Leisure is controlled by a director of the Company and is based in
      British Columbia, Canada. Gulf Star is the 100% owner and developer of the
      residential and tourist project known as the Dream Island Resort, located
      on the north coast of Bahrain at Manama City.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | To acquire 80% of Gulf Star, the Company must issue five
      million common shares at $0.125 per share. The shares are to be issued
      over a three-year period as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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

| | In addition, the Company shall make cash
      payments to Star Leisure totaling $100,000 to cover a portion of hard
      costs accumulated by Star Leisure in progressing the Dream Island Project.
      During the year ended December 31, 2003, the Company paid $34,210 as
      partial payment toward the $100,000 payment. The remaining balance of
      $65,790 is due on or before August 31, 2006. The Company has also agreed
      to reimburse Star Leisure and Jzala Investment Group (20% shareholder of
      Gulf Star) for costs to be verified that they may have incurred upon the
      project financing being fully secured and having released in sufficient
      amounts to commence the main construction.                                                                                                                                                                                                               
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | On August 9, 2002, the Company entered into an
      assignment agreement, whereby the Company was assigned all rights and
      obligations under a Dredging and Reclamation Contract entered into by Star
      Leisure pertaining to the construction of The Dream Island Resort project.
      Under the terms of the Dredging and Reclamation contract, the Company
      issued 1,268,750 Class A Convertible Preferred shares, with a deemed value
      of $5,075,000, as full payment due under this contract. These shares were
      issued in escrow, and will be released in stages as the dredging contract
      progresses. At March 31, 2006, no value has been recorded for the shares,
      as although work has commenced on the Dream Island Project, there has not
      yet been sufficient progress to warrant a release of escrowed shares. An
      agents fee of 0.5% of the value of the shares released will be payable.

5

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Acquisition of Gulf Star World Development W.L.L. 
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company also engaged a consultant to act as an
      advisor in respect to the above noted acquisition. The company issued
      1,300,000 common shares during the year ended December 31, 2002, which
      were deposited into escrow and were to be released on the basis of the
      progress of the Dredging and Reclamation Contract noted above. During the
      year ended December 31, 2002, these shares were recorded at their
      estimated fair value of $65,000, and had been deferred with other related
      investment costs pertaining to the acquisition of Gulf Star. During the
      year ended December 31, 2004 the agreement with this consultant was
      terminated, and the 1,300,000 common shares were returned to the Company
      for cancellation.                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Pursuant to an agreement dated October 20, 2003, during
      the year ended December 31, 2004 the Company issued 1,137,500 Class A
      convertible preferred shares of the Company at a deemed value of $4 per
      share for Technical Planning services for the Dream Island Project. These
      shares were issued in escrow, and were to be released over time as work on
      the project progressed. In December 2004 this agreement was terminated,
      and the 1,137,500 preferred shares were returned to the Company for
      cancellation.                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On March 13, 2006, the Ministry of Finance, Bahrain
      (MOFB) notified Gulf Star that due to a lack of progress and failure to
      advance the project in a timely basis, the MOFB intends to seek
      termination of the lease contract for the Dream Island site and have Gulf
      Star pay all associated expenses incurred for the enforcement thereof. In
      addition, the MOFB has indicated that it reserves the right to claim
      damages towards all losses it has incurred and all gains denied. The
      Company, Gulf Star, and Star Leisure intend to oppose the action by the
      MOFB. However, due to the uncertainty of the future viability of the Dream
      Island project, management has written-down the associated deferred
      investment costs to a nominal value of $1.00.

6

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|6. | 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 settlement of debts, convertible
      loans, and for services provided to the Company during the following
      years:

| |                                              |  | Number
      of |  |  | Number
      of |   |   | Weighted        |  |   |           |  
| | -------------------------------------------- |  | --------------- |  |  | --------------- | - | - | --------------- |  | - | --------- | -
| |                                              |  | Preferred       |  |  | Common          |   |   | Average Price   |  |   |           |  
| |                                              |  | Shares          |  |  | Shares          |   |   | Per
      Share |  |   | Total     |  
| |                                              |  |                 |  |  |                 |   |   |                 |  |   |           |  
| | 1995 Consulting fee                          |  | -               |  |  | 50,000          |   | $ | 0.03            |  | $ | 1500      |  
| | 1998 Management fee                          |  | -               |  |  | 7,000,000       |   | $ | 0.001           |  |   | 7,000     |  
| | 1998 Consulting fee                          |  | -               |  |  | 620,000         |   | $ | 0.01            |  |   | 6,200     |  
| | 2000 Finders fee                             |  | -               |  |  | 50,000          |   | $ | 0.001           |  |   | 50        |  
| | 2001 Consulting fee                          |  | -               |  |  | 708,406         |   | $ | 2.07            |  |   | 1,468,254 |  
| | 2002 Deferred investment cost                |  | -               |  |  | 1,300,000       |   | $ | 0.05            |  |   | 65,000    |  
| | 2002 Consulting fee                          |  | -               |  |  | 684,143         |   | $ | 0.19            |  |   | 131,400   |  
| | 2002 Debt settlement                         |  | -               |  |  | 680,886         |   | $ | 0.20            |  |   | 138,006   |  
| | 2003 Consulting fee                          |  | -               |  |  | 1,450,000       |   | $ | 0.14            |  |   | 203,000   |  
| | 2003 Termination fee                         |  | 198,000         |  |  | -               |   | $ | 4.00            |  |   | 792,000   |  
| | 2004 Loan conversion                         |  | -               |  |  | 825,364         |   | $ | 0.06            |  |   | 48,537    |  
| | 2004 Loan settlement                         |  | -               |  |  | 613,000         |   | $ | 0.07            |  |   | 45,000    |  
| | 2004 Consulting fee                          |  | -               |  |  | 360,000         |   | $ | 0.40            |  |   | 142,500   |  
| | 2004 Deferred investment cost (cancellation) |  | -               |  |  | (1,300,000      | ) | $ | 0.05            |  |   | (65,000   | )
| | 2005 Communications                          |  | -               |  |  | 56,000          |   | $ | 0.50            |  |   | 28,000    |  
| | 2005 Consulting fees                         |  | -               |  |  | 1,135,000       |   | $ | 0.29            |  |   | 333,700   |  
| | 2005 Legal fees                              |  | -               |  |  | 50,000          |   | $ | 0.50            |  |   | 25,000    |  
| | 2005 Loan conversion                         |  | -               |  |  | 635,901         |   | $ | 0.39            |  |   | 250,160   |  
| | 2005 Stock dividend                          |  | -               |  |  | 4,120,643       |   | $ | 0.64            |  |   | 2,678,418 |  
| |                                              |  |                 |  |  |                 |   |   |                 |  |   |           |  
| |                                              |  | 198,000         |  |  | 19,039,343      |   |   |                 |  | $ | 6,298,725 |  

These amounts have been excluded from
the statements of cash flows.

7

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED          
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2006                                        
|(Stated in U.S. Dollars)                              
|(Unaudited)                                           

|7. | Related Party Transactions Notes 4 and
  8                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                  
|   | The Company was charged the following by shareholders,
      directors, by companies controlled by directors and/or shareholders of the
      Company, and by companies with directors in
common:

| |                    |   |                    |  |   |               |  |   | Cumulative from | 
| | ------------------ | - | ------------------ |  | - | ------------- |  | - | --------------- | 
| |                    |   |                    |  |   |               |  |   | February 28,    | 
| |                    |   |                    |  |   |               |  |   | 1989 (Date of   | 
| |                    |   | Three months ended |  |   | Inception) to | 
| |                    |   | March 31,          |  |   | March 31,     | 
| |                    |   | 2006               |  |   | 2005          |  |   | 2006            | 
| |                    |   |                    |  |   |               |  |   |                 | 
| | Consulting fees    | $ | -                  |  | $ | -             |  | $ | 35,670          | 
| | Interest           |   | 3,745              |  |   | 7,187         |  |   | 45,703          | 
| | Management fees    |   | 2,490              |  |   | -             |  |   | 155,862         | 
| | Office and general |   | -                  |  |   | -             |  |   | 26,944          | 
| | Rent               |   | 5,198              |  |   | 4,892         |  |   | 74,392          | 
| |                    |   |                    |  |   |               |  |   |                 | 
| |                    | $ | 11,433             |  | $ | 12,079        |  | $ | 338,571         | 

|   | Deferred investment costs at March 31, 2006, included $1
      (December 31, 2005: $1) charged by a related company in respect to a cash
      payment required pursuant to an acquisition agreement (Note 6).                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                            
|   | At March 31, 2006, accounts payable includes $4,837
      (December 31, 2005: $4,837) due to directors of the Company and companies
      controlled by directors of the Company in respect of unpaid management
      fees and expenses incurred on behalf of the Company.                                
|   |                                                                                                                                                                                                                                                                                                            
|   | At March 31, 2006 and December 31, 2005, due to related
      parties are comprised of expenses for operating costs paid on behalf of
      the Company by companies with directors in common. These amounts are
      non-interest bearing, unsecured and there are no specific terms for
      repayment.
|   |                                                                                                                                                                                                                                                                                                            
|8. | Subsequent Events                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                            
|   | Subsequent to March 31, 2006, the Company:                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                            
|   | a.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                            
|   | b.                                                                                                                                                                                                                                                                                                         

8

---

|2. | Plan of Operation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is in the development stage, accordingly
      certain matters discussed herein are based on potential future
      circumstances and developments, which the Company anticipates, but which
      cannot be assured. The Company is currently devoting its efforts to
      developing The Dream Island Resort project in Manama, Bahrain. The Dream
      Island Resort project will be an integrated resort, entertainment, hotel
      and real estate facility to be built on a 41 acre man-made island off the
      north eastern coast of Manama, Bahrain.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 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 outstanding common shares of the Company were
      converted into an equal number of common shares of Strategic. The purpose
      of this merger was to change the corporate jurisdiction of the Company
      from Colorado to Delaware and to change the name of the Company. The
      surviving corporation of the merger is Strategic, a Delaware
      corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has an agreement to purchase 80% of the
      outstanding shares of Gulf Star World Development W.L.L. (Gulf Star), a
      Bahrain corporation, from Star Leisure & Entertainment Inc. (Star
      Leisure). Star Leisure is controlled by a director of the Company and is
      based in British Columbia, Canada. Gulf Star is the 100% owner and
      developer of the Dream Island Resort project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | To acquire 80% of Gulf Star, the Company must issue five
      million common shares at a price of $0.125 per share. The shares are to be
      issued over a three year period based on construction progress. In
      addition, the Company shall make cash payments to Star Leisure totaling
      $100,000 to cover a portion of hard costs accumulated by Star Leisure in
      progressing the Dream Island Project. In 2003 the Company had paid
      $34,210, with the balance of $65,790 to be paid by August 31,
  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On March 13, 2006, the Ministry of Finance, Bahrain
      (MOFB) notified Gulf Star that due to a lack of progress and failure to
      advance the project in a timely basis, the MOFB intends to seek
      termination of the lease contract for the Dream Island site. The Company,
      Gulf Star, and Star Leisure intend to oppose the action by the MOFB.
      However, due to the uncertainty of the future viability of the Dream
      Island project, management has written-down the associated deferred
      development costs to a nominal value of $1.00 at December 31,
  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The financial statements have been prepared on a going
      concern basis. The Company has accumulated a deficit of $8,045,450 since
      inception, and at March 31, 2006 has a working capital deficiency of
      $300,719. Its ability to continue as a going concern is dependent upon the
      ability of the Company to generate profitable operations in the future
      and/or to obtain the necessary financing to meet its obligations and repay
      its liabilities arising from normal business operations when they come
      due. The outcome of these matters cannot be predicted with any certainty
      at this time. The Company has historically satisfied its capital needs
      primarily by issuing equity securities. Management plans to continue to
      provide for its capital needs during the next twelve months by issuing
      equity securities, private placements, loans, and debentures convertible
      into equity. Additional operating capital could be obtained through the
      potential exercise of management and director stock options and/or
      exercise of outstanding stock purchase warrants. The Company remains at
      the development stage, as there were no revenues during the past fiscal
      year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 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 constructed as part of
      the Dream Island complex.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The first stage of the project, dredging and reclamation
      of the 41 acre man-made island site, has been paid by the issuance to
      Robodh Contracting Establishment, Manama, Bahrain, of 1,268,750 Class 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

9



---

|   | In August 2004, construction commenced on the Dream
      Island Project. This initial phase of work consists of the construction of
      a temporary causeway to provide access from the coast to the offshore site
      of the future island location. Large haulage trucks have begun
      transporting and dumping quarry stone to create the temporary causeway
      from which access will be gained to the island site. Once the temporary
      causeway has been completed, work will commence on the creation of the
      Dream Island perimeter of the future offshore island. Thereafter,
      reclamation dredging operations will commence to move sand into the
      perimeter thereby creating the Dream Island site.                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Management believes that the close connections and
      contacts it has made in the Middle East, especially the efforts of its
      Chairman, Mr. Abbas Salih, who has been stationed predominately in Saudi
      Arabia and Bahrain for the past year to oversee the project, will be of
      immense value in completing other essential contracts during the course of
      this project.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In December 2004, the Company signed a Letter Of Intent
      (the "LOI") with G7 Entertainment Ltd. (G7), a British Columbia, Canada
      registered corporation. G7 is controlled by directors of the Company. The
      LOI outlines the general terms and conditions which will govern a more
      definitive agreement to be entered into between the Company and G7,
      relating to the engagement of the Company as a financial partner in
      certain motion picture production ventures to be carried on by G7. Under
      the LOI, G7 has appointed the Company as the exclusive agent of G7 for the
      purposes of facilitating financing to meet that portion of G7's film
      production budgets that is not met through non-equity financing such as
      presales, subsidies or other similar non-debt financial
programs.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | It is the intent of the parties that the Company will,
      subject to such transactions being qualified or eligible under applicable
      securities laws, receive financing funds as a private placement investment
      in the Company and to issue common shares of the Company in respect
      therefore, at a price per share to be agreed to by the Company and the
      participating investors. The Company will, in turn, advance the required
      films equity funding to G7.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | All funds advanced by the Company to G7 will be advanced
      to purchase a participating equity interest in certain film(s). The amount
      of participating interest in each film to be purchased by the Company will
      be negotiated on a case-by-case basis. In addition, the Company will also
      be entitled to receive options (also to be negotiated on a case-by-case
      basis) entitling the Company to purchase a greater participating interest
      in a film, up to an aggregate of fifty percent, with such option being
      exercisable by the Company through the issuance of common shares of the
      Company or as negotiated by the parties by the payment of cash, or some
      combination of cash and common shares of the Company.                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company's plan during the next quarter and for the
      balance of 2006 is to maintain the size and staffing of its Vancouver,
      British Columbia head office at the current levels. There are no plans to
      hire additional employees as administrative requirements at head office
      are now being adequately met by the efforts of the board members the
      full-time and temporary staff and consultants. Field operations and
      construction activities in Bahrain will be conducted through contracting
      and sub-contracting of work.                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company's chief executive officer and chief financial
      officer evaluated the Company's disclosure controls and procedures as of
      the end of the period covered by this quarterly report. Based upon the
      evaluation, the Company's chief executive officer and chief financial
      officer concluded that the Company's disclosure controls and procedures
      are effective.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the quarterly period covered by this report, there
      were no changes in the Company's internal controls over financial
      reporting that materially affected, or are reasonably likely to materially
      affect, the Company's internal controls over financial
  reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

10



---

PART II  OTHER INFORMATION

|1. | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | -
        None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | Changes in Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Sales of Securities Without Registration Under the
      Securities Act of 1933                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On March 11, 2005, the Company issued 4,060,643 common
      shares, net of escrowed shares, pursuant to a common stock dividend
      declared by the Board of Directors on February 14, 2005, payable to the
      shareholders of record as of March 4, 2005. In connection with this stock
      dividend, pursuant to the terms of stock option, convertible debenture,
      and stock warrant agreements the number of units or shares issuable under
      those agreements shall be increased by 20% and the exercise or conversion
      price shall be decreased by 20%. These shares are restricted under Rule
      144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On November 15, 2002 the Company entered into a
      Convertible Loan Facility Agreement with Icon Management Ltd. (Icon)
      whereby the Company would, from time to time, borrow operating funds from
      Icon, at an interest rate of ten percent (10%), repayable on demand. The
      lender has the right to convert all or part of the principal sum and
      interest into units at a conversion rate which is calculated at a discount
      to the average closing market price for ten days preceding a loan advance
      or conversion of interest. Each unit consists of one common share of the
      Company and one non-transferable share purchase warrant, expiring 2 years
      from the conversion date, exercisable at the applicable conversion rate.
      Certain loans made under this agreement had specific maturity dates,
      thereby limiting to 2 years the lenders right to convert all or part of
      the principal sum into units. During the year ended December 31, 2004,
      Icon converted $48,537 of the loan into 825,364 units of the Company,
      including warrants exercisable at an average price of $0.06 per share,
      expiring at various dates between December 31, 2004 and March 31, 2006. On
      December 31, 2004, Icon exercised warrants to purchase 643,715 shares.
      During the year ended December 31, 2005, Icon fully converted the
      remaining $227,140 of the loan plus all the accrued interest of $23,020,
      into 635,901 units of the Company, including warrants exercisable at an
      average price of $0.39 per share, expiring at various dates between April
      1, 2005 and January 31, 2007. During the year ended December 31, 2005,
      Icon also exercised warrants to purchase a further 420,107 shares for cash
      proceeds of $43,153. This transaction is with an offshore non-U.S. person;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On January 31, 2003, the Company issued 1,268,750 Class A
      Convertible Preferred Shares(1), at a deemed value of $4.00
      per share, as payment for the dredging and reclamation services to be
      performed by Robodh Contracting Establishment of Manama, Bahrain. The
      total value of the Dredging and Reclamation Works contract is $5,075,000.
      These shares were issued in escrow and will be released over time as work
      on the Dream Island Project dredging progresses. This transaction is with
      an offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On March 13, 2003 the Company completed an offering of
      650,000 units of its share capital to one accredited investor at a price
      of $0.10 per unit, each unit consisting of one share of common stock and
      one common stock share purchase warrant. Each common stock purchase
      warrant gives the investor the right to purchase one additional share of
      common stock at any time during the first two years at a price of $0.10
      per share. Total cash proceeds of $65,000 were allocated to working
      capital. In July 2004, the 320,000 warrants were exercised, and 320,000
      shares were issued for cash proceeds of $32,000. During the period ended
      September 30, 2005, the investor exercised the remaining warrants to
      purchase a further 330,000 shares for cash proceeds of $33,000. These
      shares were issued pursuant to an exemption from registration under
      Section 4(6) of the Securities Act of 1933. Sale or transfer of the shares
      by the investor shall be in accordance with the provisions of Regulation
      S, or pursuant to registration under the Securities Act of 1933 or
      pursuant to an available exemption from registration. This transaction is
      with an offshore non-U.S. person; accordingly, these securities are exempt
      from registration pursuant to Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

11



---

| | On August 10, 2003 the Company entered into a
      Convertible Loan Facility Agreement with Star Leisure & Entertainment
      Inc. (Star Leisure), a company controlled by a Director and Officer of
      Strategic, whereby the Company would, from time to time, borrow operating
      funds from Star Leisure, at an interest rate of ten percent (10%),
      repayable on demand. The lender has the right to convert all or part of
      the principal sum and interest into units at a conversion rate which is
      calculated at a discount to the average closing market price for ten days
      preceding a loan advance or conversion of interest. Each unit consists of
      one common share of the Company and one non-transferable share purchase
      warrant, expiring 2 years from the conversion date, exercisable at the
      applicable conversion rate. Certain loans made under this agreement had
      specific maturity dates, thereby limiting to 2 years the lenders right to
      convert all or part of the principal sum into units. At March 31, 2006,
      Star Leisure had advanced a total of $103,206 and accrued interest of
      $28,264. As of March 31, 2006, all of the loans matured, and the right to
      convert this principal amount into units expired. Under the terms of the
      Convertible Loan Facility Agreement, any loans that mature without being
      converted or repaid become due on demand. The lender retains the right to
      convert the total accrued interest of $28,264 into units. Star Leisure has
      not converted any part of the principal sums advanced or accrued interest
      into units as of March 31, 2006. Subsequent to March 31, 2006, pursuant to
      this agreement, the Company received loan proceeds of $49,700, which is
      due on demand and is convertible anytime into 416,248 units of the
      Company. Conversion of this loan and associated warrants to equity will be
      at a rate of $0.119 per share. This transaction is with an offshore
      non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | On November 30, 2003, the Company issued
      198,000 Class A Convertible Preferred Shares(1)at a deemed
      value of $4.00 per share to settle a termination fee of $792,000. This
      termination fee is to a former contractor who was to perform planning
      services for the Company that were subsequently assigned to another
      contractor. This transaction is with an offshore non-U.S. person;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | In August 2004, the Company issued 10,000
      common shares at a deemed price of $2.00 per share, for a total deemed
      consideration of $20,000, pursuant to a Consulting Services Agreement for
      financial consulting. This transaction is with an offshore non-U.S.
      person; accordingly, these securities are exempt from registration
      pursuant to Regulation S, however they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Company also issued 300,000 common shares
      in August 2004, at a deemed price of $0.38 per share, for a total deemed
      consideration of $112,500, pursuant a Promotional and Capital Funding
      Agreement for financial and investor relation services. These shares are
      held in escrow and are to be released subject to the Company obtaining
      certain future financial goals. This transaction is with an offshore
      non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144. In June 2005, this agreement was terminated, and the escrowed
      300,000 common shares, and escrowed 60,000 common dividend shares were
      returned for cancellation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | The Company issued an additional 563,000 common
      shares in August 2004, as a $30,000 partial settlement of a loan from
      Canarab Acquisitions Inc. (Canarab), a company controlled by a director.
      In 2001, Canarab secured a loan on behalf of the Company, and the lender
      received as fees and collateral 563,000 shares of the Company that were
      owned by Canarab. The lender subsequently applied the collateral shares as
      payment of the outstanding loan. Accordingly, the Company issued 563,000
      common shares to Canarab as reimbursement for those shares forfeited to
      the lender. This transaction is with an offshore non-U.S. person;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S, however they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | In August 2004 work commenced on the Dream
      Island Project, however there has not yet been sufficient progress to
      warrant a release of any of the escrowed shares. In January 2005, the
      Company issued 141,000 common shares at a deemed price of $.50 per share,
      for a total deemed consideration of $70,500, pursuant to various
      consulting agreements for legal, computer, and financial services. These
      transactions are with offshore non-U.S. persons; accordingly, these
      securities are exempt from registration pursuant to Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

12



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| | In November 2004, the Company issued 350,000 common shares
      at a deemed price of $0.35 per share, for a total deemed consideration of
      $122,500, pursuant a Promotional and Capital Funding Agreement for
      financial and investor relation services. This transaction is with an
      offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | The Company issued 50,000 common shares in January 2005, at
      a deemed price of $0.84 per share, for a total deemed consideration of
      $42,000, pursuant a Promotional and Capital Funding Agreement for
      financial and investor relation services. This transaction is with an
      offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | The Company also issued 400,000 common shares in January
      2005, at a deemed price of $0.25 per share, for a total deemed
      consideration of $100,000, pursuant a Promotional and Capital Funding
      Agreement for financial and investor relation services. Of these shares,
      250,000 are held in escrow and are to be released subject to the Company
      obtaining certain future financial goals. This transaction is with an
      offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | In March 2005 the Company entered into a Promotional and
      Capital Funding Agreement for financial and investor relation services.
      Pursuant to this agreement, the Company issued 100,000 common shares in
      May 2005, at a deemed price of $0.36 per share, for a total deemed
      consideration of $36,000. This transaction is with an offshore non-U.S.
      person; accordingly, these securities are exempt from registration
      pursuant to Regulation S, however they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | In December 2005 the Company entered into three Consulting
      Agreements for public relations and promotional services. Pursuant to
      these agreements, the Company issued 800,000 common shares at a deemed
      price of $0.25 per share, for a total deemed consideration of $200,000.
      These transactions are with offshore non-U.S. persons; accordingly, these
      securities are exempt from registration pursuant to Regulation S, however
      they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | On May 5, 2006 the Company entered into a Convertible Loan
      Facility Agreement with CMB Investments Ltd. (CMB), a company controlled
      by a Director and Officer of Strategic, whereby the Company would, from
      time to time, borrow operating funds from CMB, at an interest rate of ten
      percent (10%), repayable on demand. The lender has the right to convert
      all or part of the principal sum and interest into units at a conversion
      rate which is calculated at a discount to the average closing market price
      for ten days preceding a loan advance or conversion of interest. Each unit
      consists of one common share of the Company and one share purchase
      warrant, expiring 2 years from the conversion date, exercisable at the
      applicable conversion rate. Subsequent to March 31, 2006; loans, accrued
      interest, cash advances and accounts payable, were consolidated under this
      new agreement, resulting in a new convertible loan payable in the amount
      of $65,507, of this amount $57,300 was outstanding at March 31, 2006. This
      loan is convertible into 682,365 units. Conversion of this loan and
      associated warrants to equity will be at a rate of $0.096 per share. This
      transaction is with an offshore non-U.S. person; accordingly, these
      securities are exempt from registration pursuant to Regulation S.

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

|3. | Defaults Upon Senior Securities                          
|-- | ---------------------------------------------------------
|   |                                                          
|   | - None                                                   
|   |                                                          
|4. | Submission of Matters to a Vote of Security
      Holders
|   |                                                          
|   | - None                                                   

---

|5. | Other Information
|-- | -----------------
|   |                  
|   | - None           
|   |                  
|6. | Exhibits         

Table ofExhibit
        Items
      Description
      Exhibit601-3(i)
      Articles of Incorporation
      Note 1601-(3)(ii)
      Bylaws
      Note 1601-(3)(iii)
      Certificate of Amendment
      Note 1601-(10)
      Stock Award Plan
      Note 2601-(31)
      Rule 13a-14(a)/15d-14(a)
        Certifications
      Exhibit 31.1601-(31)
      Rule 13a-14(a)/15d-14(a) Certifications
      Exhibit 31.2601-(32)
      Section 1350 Certifications
      Exhibit 32.1601-(32)
      Section 1350 Certifications
      Exhibit 32.2


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


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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|      |                    |  | Strategic Internet Investments, Incorporated
|----- | ------------------ |  | --------------------------------------------
|      |                    |  |                                             
|Date: | June 9,
      2006 |  | /s/ Ralph
      Shearing                    
|      |                    |  | Ralph Shearing, CEO, Director               
|      |                    |  |                                             
|Date: | June 9,
      2006 |  | /s/ Abbas
      Salih                       
|      |                    |  | Abbas Salih, CFO, Director                  

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