---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

Quarterly Report Under Section 13 or 15(d) of The 
  Securities Exchange Act of 1934

For the Quarter Ended: June 30, 2003Commission File Number: 33-28188

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

|Delaware                 | 84-1116458            
|------------------------ | ----------------------
|(State of Incorporation) | (I.R.S. Employer      
|                         | Identification Number)

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

Registrant's Telephone Number, including area code: (604)
  684-8662

Indicate by check mark whether the Registrant (1) has filed
  all reports required to be filed under Section 13 or 15(d) of the Securities
  Exchange Act of 1934 during the preceding 12 months (or for such shorter period
  that the Registrant was required to file such reports), and (2) has been subject
  to the filing requirements for at least the past 90 days. Yes x
  No  ̈

Indicate the number of shares outstanding of each of the Issuer's
  classes of common stock, as of the end of the Period.

17,305,596 as at June 30, 2003

---

PART 1 - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED)
|------- | --------------------------------
|        |                                 
|        | i)                              
|        | ii)                             
|        | iii)                            
|        | iv)                             
|        | v)                              

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003

(Stated in US Dollars)

(Unaudited)

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  INTERIM CONSOLIDATED BALANCE SHEETS
  June 30, 2003 and December 31, 2002
  (Stated in US Dollars)(Unaudited)

|                                                      | June 30, |            | December 31, |  
|----------------------------------------------------- | -------- | ---------- | ------------ | -
|ASSETS                                                | 2003     |            | 2002         |  
|                                                      |          |            |              |  
|Current                                               |          |            |              |  
|Prepaid expenses  Note 4                             | $        | 167,810    |              | $
|                                                      |          |            |              |  
|Capital assets                                        |          | 1,152      |              |  
|Deferred investment costs  Note 5                    |          | 99,210     |              |  
|                                                      |          |            |              |  
|                                                      | $        | 268,172    |              | $
|                                                      |          |            |              |  
|                                                      |          |            |              |  
|LIABILITIES                                           |          |            |              |  
|                                                      |          |            |              |  
|Current                                               |          |            |              |  
|Bank indebtedness                                     | $        | 1,235      |              | $
|Accounts payable                                      |          | 191,478    |              |  
|Due to related parties                                |          | 49,259     |              |  
|Loans payable                                         |          | 85,650     |              |  
|                                                      |          |            |              |  
|                                                      |          | 327,622    |              |  
|Loans payable                                         |          | 57,726     |              |  
|                                                      |          |            |              |  
|                                                      |          | 385,348    |              |  
|                                                      |          |            |              |  
|                                                      |          |            |              |  
|STOCKHOLDERSDEFICIENCY                               |          |            |              |  
|                                                      |          |            |              |  
|Capital Stock  Note 5                                |          |            |              |  
|Class A Convertible Preferred stock, $0.001 par value |          |            |              |  
|10,000,000 authorized, 1,268,750 outstanding          |          | -          |              |  
|Class B preferred stock, $0.001 par value             |          |            |              |  
|10,000,000 authorized, none outstanding               |          |            |              |  
|Common stock, $0.001 par value                        |          |            |              |  
|100,000,000 authorized                                |          |            |              |  
|17,305,596 outstanding (2002: 15,205,596 outstanding) |          | 17,304     |              |  
|Additional paid-in capital                            |          | 2,816,828  |              |  
|Contributed capital                                   |          | 240,527    |              |  
|Deficit accumulated during the development stage      |          | (3,191,835 | )            |  
|                                                      |          |            |              |  
|                                                      |          | (117,176   | )            |  
|                                                      |          |            |              |  
|                                                      | $        | 268,172    |              | $
|                                                      |          |            |              |  

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
  for the three and six months ended June 30, 2003 and 2002
  and the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)

(Unaudited)

|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   | Cumulative     |  
|----------------------------------- | - | -------------- | - | - | -------------- | - | - | ---------------- | - | - | ---------- | - | - | -------------- | -
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   | from February  |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   | 28, 1989 (Date |  
|                                    |   | Three months   |   |   | Six months     |   |   | of Inception) to |  
|                                    |   | ended June 30, |   |   | ended June 30, |   |   | June 30,         |  
|                                    |   | 2003           |   |   | 2002           |   |   | 2003             |   |   | 2002       |   |   | 2003           |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|General and Administrative Expenses |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|Accounting and audit fees           | $ | 11,715         |   | $ | 1,150          |   | $ | 11,715           |   | $ | 2,525      |   | $ | 55,872         |  
|Amortization                        |   | 102            |   |   | 134            |   |   | 204              |   |   | 280        |   |   | 1,876          |  
|Consulting fees                     |   | 42,424         |   |   | 44,501         |   |   | 63,424           |   |   | 53,501     |   |   | 1,756,928      |  
|Filing fees                         |   | 1,245          |   |   | 1,276          |   |   | 1,080            |   |   | 1,452      |   |   | 12,580         |  
|Interest                            |   | 1,672          |   |   | -              |   |   | 3,027            |   |   | -          |   |   | 8,688          |  
|Investor relations                  |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | 50,502         |  
|Legal fees                          |   | 1,000          |   |   | 6,492          |   |   | 4,544            |   |   | 6,492      |   |   | 101,018        |  
|Management fees                     |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | 112,000        |  
|Office and general                  |   | 4,143          |   |   | 210            |   |   | 4,361            |   |   | 2,605      |   |   | 105,860        |  
|Rent                                |   | -              |   |   | -              |   |   | -                |   |   | 1,546      |   |   | 25,995         |  
|Telephone                           |   | 2,226          |   |   | 791            |   |   | 4,862            |   |   | 791        |   |   | 30,057         |  
|Transfer agent fees                 |   | 1,742          |   |   | 1,733          |   |   | 2,724            |   |   | 2,238      |   |   | 23,470         |  
|Travel and promotion                |   | 18,167         |   |   | -              |   |   | 18,167           |   |   | -          |   |   | 31,915         |  
|Non-cash compensation charge        |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | 215,085        |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|Loss before the following:          |   | (84,436        | ) |   | (56,287        | ) |   | (114,108         | ) |   | (71,430    | ) |   | (2,531,846     | )
|Unauthorized distribution           |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | (69,116        | )
|Gain on settlement of debt          |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | 15,464         |  
|Write-down of advances to related   |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|party                               |   | -              |   |   | -              |   |   | -                |   |   | -          |   |   | (606,337       | )
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|Net loss for the period             | $ | (84,436        | ) | $ | (56,287        | ) | $ | (114,108         | ) | $ | (71,430    | ) | $ | ( 3,191,835)   |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|Basic loss per share                | $ | (0.01          | ) | $ | (0.00          | ) | $ | (0.01            | ) | $ | (0.01      | ) |   |                |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|Weighted average number of common   |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  
|shares outstanding                  |   | 16,094,607     |   |   | 12,540,567     |   |   | 15,720,790       |   |   | 12,540,567 |   |   |                |  
|                                    |   |                |   |   |                |   |   |                  |   |   |            |   |   |                |  

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
  for the six months ended June 30, 2003 and 2002
  and the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)(Unaudited)

|                                   |   |                |   |                  |         |   | Cumulative     |           
|---------------------------------- | - | -------------- | - | ---------------- | ------- | - | -------------- | ----------
|                                   |   |                |   |                  |         |   | from February  |           
|                                   |   |                |   |                  |         |   | 28, 1989 (Date |           
|                                   |   | Six months     |   | of Inception) to |        
|                                   |   | ended June 30, |   | June 30,         |        
|                                   |   | 2003           |   |                  | 2002    |   | 2003           |           
|                                   |   |                |   |                  |         |   |                |           
|Operating Activities               |   |                |   |                  |         |   |                |           
|Net loss for the period            | $ | (114,108       | ) | $                | (71,430 | ) | $              | (3,191,835
|Adjustments to reconcile net loss  |   |                |   |                  |         |   |                |           
|to net cash used in operations:    |   |                |   |                  |         |   |                |           
|Amortization                       |   | 204            |   |                  | 280     |   |                | 1,876     
|Consulting fees                    |   | -              |   |                  | -       |   |                | 6,200     
|Gain on settlement
      of debt   |   | -              |   |                  | -       |   |                | (15,464   
|Management fees                    |   | -              |   |                  | -       |   |                | 7,000     
|Write-down of advances
      to    |   |                |   |                  |         |   |                |           
|related
      party                |   | -              |   |                  | -       |   |                | 606,337   
|Non-cash compensation
      charge |   | -              |   |                  | -       |   |                | 215,085   
|Issue of stock pursuant
      to   |   |                |   |                  |         |   |                |           
|consulting
      agreements        |   | 63,424         |   |                  | -       |   |                | 1,518,411 
|Changes in non-cash items:         |   |                |   |                  |         |   |                |           
|Prepaid expenses                   |   | (234           | ) |                  | -       |   |                | (238      
|Accounts payable                   |   | (11,769        | ) |                  | 53,875  |   |                | 447,491   
|Advance to related
      party     |   | -              |   |                  | -       |   |                | (606,337  
|Due to related parties             |   | (55            | ) |                  | 7,065   |   |                | 64,883    
|                                   |   |                |   |                  |         |   |                |           
|                                   |   |                |   |                  |         |   |                |           
|Cash used in operating activities  |   | (62,538        | ) |                  | (10,210 | ) |                | (946,587  
|                                   |   |                |   |                  |         |   |                |           
|                                   |   |                |   |                  |         |   |                |           
|Investing Activities               |   |                |   |                  |         |   |                |           
|Organization costs                 |   | -              |   |                  | -       |   |                | (750      
|Acquisition of capital assets      |   | -              |   |                  | -       |   |                | (2,278    
|Deferred investment costs          |   | (34,210        | ) |                  | -       |   |                | (34,210   
|                                   |   |                |   |                  |         |   |                |           
|                                   |   |                |   |                  |         |   |                |           
|Cash used in investing activities  |   | (34,210        | ) |                  | -       |   |                | (37,238   
|                                   |   |                |   |                  |         |   |                |           

/Contd.

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
  for the six months ended June 30, 2003 and 2002
  and the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)(Unaudited)

Continued

|                                   |   |                |  |   |                  |  |   | Cumulative     |  
|---------------------------------- | - | -------------- |  | - | ---------------- |  | - | -------------- | -
|                                   |   |                |  |   |                  |  |   | from February  |  
|                                   |   |                |  |   |                  |  |   | 28, 1989 (Date |  
|                                   |   | Six months     |  |   | of Inception) to | 
|                                   |   | ended June 30, |  |   | June 30,         | 
|                                   |   | 2003           |  |   | 2002             |  |   | 2003           |  
|Financing Activities               |   |                |  |   |                  |  |   |                |  
|Bank indebtedness                  |   | 1,216          |  |   | -                |  |   | 1,235          |  
|Loans payable                      |   | 30,532         |  |   | 10,277           |  |   | 143,376        |  
|Proceeds from issuance of          |   |                |  |   |                  |  |   |                |  
|common stock                       |   | 65,000         |  |   | -                |  |   | 841,042        |  
|Payment of offering costs          |   | -              |  |   | -                |  |   | (27,270        | )
|Contributed capital                |   | -              |  |   | -                |  |   | 25,442         |  
|                                   |   |                |  |   |                  |  |   |                |  
|                                   |   |                |  |   |                  |  |   |                |  
|Cash provided by financing         |   |                |  |   |                  |  |   |                |  
|activities                         |   | 96,748         |  |   | 10,277           |  |   | 983,825        |  
|                                   |   |                |  |   |                  |  |   |                |  
|                                   |   |                |  |   |                  |  |   |                |  
|Increase in cash during the period |   | -              |  |   | 67               |  |   | -              |  
|                                   |   |                |  |   |                  |  |   |                |  
|Cash, beginning of the period      |   | -              |  |   | 56               |  |   | -              |  
|                                   |   |                |  |   |                  |  |   |                |  
|                                   |   |                |  |   |                  |  |   |                |  
|Cash, end of the period            | $ | -              |  | $ | 123              |  | $ | -              |  
|                                   |   |                |  |   |                  |  |   |                |  
|Supplementary disclosure of cash   |   |                |  |   |                  |  |   |                |  
|flow information:                  |   |                |  |   |                  |  |   |                |  
|Cash paid for:                     |   |                |  |   |                  |  |   |                |  
|Interest                           | $ | -              |  | $ | -                |  | $ | 5,661          |  
|                                   |   |                |  |   |                  |  |   |                |  
|Income taxes                       | $ | -              |  | $ | -                |  | $ | -              |  
|                                   |   |                |  |   |                  |  |   |                |  

Non-cash Transactions  Note 6

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIENCY
  for the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)(Unaudited)

|                                           |              |  |   |           |  |   |             |  |             |         |  | Deficit     |         |   |       |        
|------------------------------------------ | ------------ |  | - | --------- |  | - | ----------- |  | ----------- | ------- |  | ----------- | ------- | - | ----- | -------
|                                           |              |  |   |           |  |   |             |  |             |         |  | Accumulated |         |   |       |        
|                                           |              |  |   |           |  |   | Additional  |  |             |         |  | During the  |         |   |       |        
|                                           | Common Stock |  |   | Paid-in   |  |   | Contributed |  | Development |         |  |             |        
|                                           | Shares       |  |   | Par Value |  |   | Capital     |  |             | 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 for the year                      | -            |  |   | -         |  |   | -           |  |             | -       |  |             | (84,159 | ) |       | (84,159
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|Balance, December 31, 1990                 | 66,695       |  |   | 66        |  |   | 82,664      |  |             | -       |  |             | (84,159 | ) |       | (1,429 
|Net loss for the year                      | -            |  |   | -         |  |   | -           |  |             | -       |  |             | (3,416  | ) |       | (3,416 
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|Balance, December 31, 1991                 | 66,695       |  |   | 66        |  |   | 82,664      |  |             | -       |  |             | (85,575 | ) |       | (4,845 
|Net loss for the year                      | -            |  |   | -         |  |   | -           |  |             | -       |  |             | (2,713  | ) |       | (2,713 
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|Balance, December 31, 1992                 | 66,695       |  |   | 66        |  |   | 82,664      |  |             | -       |  |             | (90,288 | ) |       | (7,558 
|Net loss for the year                      | -            |  |   | -         |  |   | -           |  |             | -       |  |             | (1,614  | ) |       | (1,614 
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        
|Balance, December 31, 1993                 | 66,695       |  |   | 66        |  |   | 82,664      |  |             | -       |  |             | (91,902 | ) |       | (9,172 
|Net loss for the year                      | -            |  |   | -         |  |   | -           |  |             | -       |  |             | (1,863  | ) |       | (1,863 
|                                           |              |  |   |           |  |   |             |  |             |         |  |             |         |   |       |        

/Contd.

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIENCY
  for the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)(Unaudited)

|                                       |              |  |           |  |             |  |             |  | Deficit     |   |         |  
|-------------------------------------- | ------------ |  | --------- |  | ----------- |  | ----------- |  | ----------- | - | ------- | -
|                                       |              |  |           |  |             |  |             |  | Accumulated |   |         |  
|                                       |              |  |           |  | Additional  |  |             |  | During the  |   |         |  
|                                       | Common Stock |  | Paid-in   |  | Contributed |  | Development |  |             |  
|                                       | Shares       |  | Par Value |  | Capital     |  | Capital     |  | Stage       |   | Total   |  
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|Balance, December 31, 1994             | 66,695       |  | 66        |  | 82,664      |  | -           |  | (93,765     | ) | (11,035 | )
|Issuances of stock for services        |              |  |           |  |             |  |             |  |             |   |         |  
|rendered  at $0.03                    | 50,000       |  | 50        |  | 1,450       |  | -           |  | -           |   | 1,500   |  
|Contributed capital                    | -            |  | -         |  | -           |  | 24,842      |  | -           |   | 24,842  |  
|Net loss for the year                  | -            |  | -         |  | -           |  |             |  | (16,735     | ) | (16,735 | )
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|Balance, December 31, 1995             | 116,695      |  | 116       |  | 84,114      |  | 24,842      |  | (110,500    | ) | (1,428  | )
|Net loss for the year                  | -            |  | -         |  | -           |  | -           |  | (9,068      | ) | (9,068  | )
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|Balance, December 31, 1996             | 116,895      |  | 116       |  | 84,114      |  | 24,842      |  | (119,568    | ) | (10,496 | )
|Issuance of stock for cash  at $0.011 | 2,000,000    |  | 2,000     |  | 19,300      |  | -           |  | -           |   | 21,300  |  
|Contributed capital                    | -            |  | -         |  | -           |  | 600         |  | -           |   | 600     |  
|Net loss for the year                  | -            |  | -         |  | -           |  | -           |  | (22,261     | ) | (22,261 | )
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|Balance, December 31, 1997             | 2,116,695    |  | 2,116     |  | 103,414     |  | 25,442      |  | (141,829    | ) | (10,857 | )
|Issuance of stock for services         |              |  |           |  |             |  |             |  |             |   |         |  
|rendered  at $0.001                   | 7,000,000    |  | 7,000     |  | -           |  | -           |  | -           |   | 7,000   |  
|
      at $0.01                       | 620,000      |  | 620       |  | 5,580       |  | -           |  | -           |   | 6,200   |  
|Net loss for the year                  | -            |  | -         |  | -           |  | -           |  | (52,308     | ) | (52,308 | )
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|                                       |              |  |           |  |             |  |             |  |             |   |         |  
|Balance, December 31, 1998             | 9,736,695    |  | 9,736     |  | 108,994     |  | 25,442      |  | (194,137    | ) | (49,965 | )
|Net loss for the year                  | -            |  | -         |  | -           |  | -           |  | 35,995      | ) | (35,995 | )
|                                       |              |  |           |  |             |  |             |  |             |   |         |  

/Contd.

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIENCY
  for the period February 28, 1989 (Date of Inception) to June 30, 2003 
  (Stated in US Dollars)(Unaudited)

|                                          |  |              |  |           |  |             |   |             |  | Deficit     |   |            |  
|----------------------------------------- |  | ------------ |  | --------- |  | ----------- | - | ----------- |  | ----------- | - | ---------- | -
|                                          |  |              |  |           |  |             |   |             |  | Accumulated |   |            |  
|                                          |  |              |  |           |  | Additional  |   |             |  | During the  |   |            |  
|                                          |  | Common Stock |  | Paid-in   |  | Contributed |   | Development |  |             |  
|                                          |  | Shares       |  | Par Value |  | Capital     |   | Capital     |  | Stage       |   | Total      |  
|                                          |  |              |  |           |  |             |   |             |  |             |   |            |  
|Balance, December 31, 1999                |  | 9,736,695    |  | 9,736     |  | 108,994     |   | 25,442      |  | (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 for the year                     |  | -            |  | -         |  | -           |   | -           |  | (336,431    | ) | (336,431   | )
|Non-cash compensation charge              |  | -            |  | -         |  | -           |   | 78,707      |  | -           |   | 78,707     |  
|                                          |  |              |  |           |  |             |   |             |  |             |   |            |  
|                                          |  |              |  |           |  |             |   |             |  |             |   |            |  
|Balance, December 31, 2000                |  | 10,920,029   |  | 10,919    |  | 447,811     |   | 104,149     |  | (566,563    | ) | (3,684     | )
|Issuance of stock for services            |  |              |  |           |  |             |   |             |  |             |   |            |  
|rendered  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 for cash 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 for the year                     |  | -            |  | -         |  | -           |   | -           |  | (2,296,406  | ) | (2,296,406 | )
|Non-cash compensation charge              |  | -            |  | -         |  | -           |   | 136,378     |  | -           |   | 136,378    |  
|                                          |  |              |  |           |  |             |   |             |  |             |   |            |  

/Contd.

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIENCY
  for the period February 28, 1989 (Date of Inception) to June 30, 2003
  (Stated in US Dollars)(Unaudited)

|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   | Deficit     |   |   |          |  
|------------------------------ | ----------- |  | ------------ |  | - | --------- |  | - | ----------- |  | - | ----------- |  | - | ----------- | - | - | -------- | -
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   | Accumulated |   |   |          |  
|                               |             |  |              |  |   |           |  |   | Additional  |  |   |             |  |   | During the  |   |   |          |  
|                               |             |  | Common Stock |  |   | Paid-in   |  |   | Contributed |  |   | Development |  |   |             |  
|                               |             |  | Shares       |  |   | Par Value |  |   | Capital     |  |   | Capital     |  |   | Stage       |   |   | Total    |  
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  
|Balance, December 31, 2001     |             |  | 12,540,567   |  |   | 12,539    |  |   | 2,219,187   |  |   | 240,527     |  |   | (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 for the year          |             |  | -            |  |   | -         |  |   | -           |  |   | -           |  |   | (214,758    | ) |   | (214,758 | )
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  
|Balance, December 31, 2002     |             |  | 15,205,596   |  |   | 15,204    |  |   | 2,550,928   |  |   | 240,527     |  |   | (3,077,727  | ) |   | (271,068 | )
|Net loss for the period        |             |  | -            |  |   | -         |  |   | -           |  |   | -           |  |   | (114,108    | ) |   | (114,108 | )
|Issuance of stock for cash     |  at $0.10  |  | 650,000      |  |   | 650       |  |   | 64,350      |  |   | -           |  |   | -           |   |   | 65,000   |  
|Issuance of stock for          |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  
|consulting services            |  at $0.14  |  | 1,450,000    |  |   | 1,450     |  |   | 201,550     |  |   | -           |  |   | -           |   |   | 203,000  |  
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  
|Balance, June 30, 2003         |             |  | 17,305,596   |  | $ | 17,304    |  | $ | 2,816,828   |  | $ | 240,527     |  | $ | (3,191,835  | ) | $ | (117,176 | )
|                               |             |  |              |  |   |           |  |   |             |  |   |             |  |   |             |   |   |          |  

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED 
  (A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
   June 30, 2003
  (Stated in US Dollars)(Unaudited)

|Note 1 | Interim Reporting
      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, 2002, as filed with the United States Securities and Exchange Commission.
      The results of operations for the six months ended June
        30, 2003 are not indicative of the results that may be expected for the
        full year.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 2 | Continuance of Operations
      The financial statements have been prepared using generally
        accepted accounting principles in the United States of America applicable
        for a going concern which assumes that the Company will realize its assets
        and discharge its liabilities in the ordinary course of business. As at
        June 30, 2003, the Company has a working capital deficiency of $159,812,
        which is not sufficient to meet its planned business objectives or ongoing
        operations for the next fiscal year. The Company has accumulated losses
        of $3,191,835 since its inception. The ability of the Company to continue
        as a going concern is dependent upon arranging the necessary financing
        to meet its obligations and pay its liabilities arising from normal business
        operations when they come due.                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 3 | Principles of Consolidation
      These interim consolidated financial statements include
        the accounts of the Company and its wholly owned subsidiaries Strategic
        Internet Investment Canada Inc. and 8351630 Canada Inc. Both of these
        subsidiaries companies are dormant and were incorporated by the Company
        in March 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 4 | Prepaid Expenses
      Included in prepaid expenses is $167,576 of prepaid
        consulting fees. These consulting fees were paid by the issuance of 1,450,000
        common shares at $0.14 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

|Note 5 | Capital Stock  Note 7
      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 either $4.00 per
        share until July 30, 2003, or thereafter at the average of twenty consecutive
        days closing prices which shall not be less than $1.50 per share or greater
        than $6.00 per share.
      Commitments
      Stock Options
      At June 30, 2003, there were a total of 265,000 share
        purchase options outstanding entitling the holders thereof the right to
        purchase one common share for each option held at $0.50 per share. These
        options expire on October 23, 2005.
      Share Purchase Warrants
      At June 30, 2003, there were 1,000,000 share purchase
        warrants outstanding entitling the holders thereof the right to purchase
        one common share for each warrant held as follows:
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Number    | Exercise Price | Expiry Date        | 
| | --------- | -------------- | ------------------ | 
| |           |                |                    | 
| | 350,000   | $0.70          | September 11, 2003 | 
| | 650,000   | $0.10          | March 13, 2005     | 
| |           |                |                    | 
| | 1,000,000 |                |                    | 

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

---

|Note 5 | Capital Stock  Note 7 (contd)
      Commitments  (contd)
      Acquisition of Gulf Star World Development W.L.L.  (contd)
      To acquire 80% of Gulf Star, the Company must issue five million common
        shares at a deemed price of $0.125 per share. The shares are to be issued
        over a three-year period as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       | In addition, the Company shall
        make two cash payments to Star Leisure totalling US$100,000 to cover a
        portion of hard costs accumulated by Star Leisure in progressing the Dream
        Island Project. The first $50,000 will be paid on or before October 11,
        2003. The second $50,000 will be paid on or before January 11, 2004. During
        the period ended June 30, 2003, the Company paid US$34,210 as partial
        payment toward the October 11, 2003 payment. The Company has also agreed
        to reimburse Star Leisure and Jzala Investment Group (20% shareholder
        of Gulf Star) for costs that they have incurred upon the project financing
        being fully secured and having released in sufficient amounts to commence
        the main construction.
      On August 9, 2002, the Company entered into an assignment
        agreement, whereby the Company was assigned all rights and obligations
        under a Dredging and Reclamation Contract entered into by Star Leisure
        pertaining to the construction of The Dream Island Resort project. Under
        the terms of the Dredging and Reclamation contract, the Company will be
        obligated to issue $5,075,000 face value Class A Convertible Preferred
        shares as full payment (1,268,750 Class A Convertible Preferred Shares).
        These shares were issued in escrow during the six months ended June 30,
        2003. The shares will be released over time as work on the project progresses.
        At June 30, 2003, no value had been recorded for the shares as work had
        not commenced on the project and none of the shares have been released
        from escrow.
      An agents fee of 0.5% of the value of the shares
        released will be payable.

---

|Note 5 | Capital Stock  Note 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 are to be released on the basis of the progress of the
        Dredging and Reclamation Contract noted above. These shares have been
        recorded at their estimated fair value ($65,000) and have been deferred
        with other related investment costs pertaining to the acquisition of Gulf
        Star World Development W.L.L.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 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 services provided to the Company
        during the following years:                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |      | Number of     | Price     |        
| | ---- | ------------- | --------- | -------
| |      | Common Shares | Per Share | $      
| |      |               |           |        
| | 1995 | 50,000        | $0.03     | 1,500  
| | 1998 | 7,000,000     | $0.001    | 7,000  
| | 1998 | 620,000       | $0.01     | 6,200  
| | 2001 | 233,333       | $0.50     | 116,667
| | 2002 | 680,886       | $0.12     | 138,006
| | 2002 | 1,380,000     | $0.07     | 93,000 
| | 2003 | 1,450,000     | $0.14     | 203,000
| |      |               |           |        
| |      | 11,414,219    |           | 565,373

|       | These amounts have been excluded from the statement of cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Note 7 | Subsequent Event
      By a letter of intent dated July 12, 2003, the Company
        agreed to issue common shares for the purchase by Gulf Star (Note 5) of
        certain real estate assets and business interests located in the Middle
        East region. The acquisition will be subject to due diligence and the
        completion of a formal acquisition agreement. The number of shares to
        be issued by the Company will be based on an independent valuation and
        $5 per share.

---

ITEM 2. MANAGEMENT'S PLAN OF OPERATION

Plan of Operation

In the following discussion, management outline's its plan
  of operation for the balance of fiscal year 2003. The discussion should be read
  in conjunction with the financial statements for the current period and the
  audited statements and notes for the year ended December 31, 2002. Certain matters
  discussed below are based upon potential future circumstances and developments
  which the Company anticipates but which cannot be assured.

As at June 30, 2003, the Company remained in the development
  stage as no revenues were generated from its operations during the first six
  months of fiscal 2003. The Company recorded a net loss of $114,108, or $0.007
  per share for the period. The comparable loss for the period ended June 30,
  2002 was $71,430 or approximately $0.006 per share. The Company had a working
  capital deficit of $159,812 and a nil cash balance at the end of the six month
  period.

The 'Dream Island' project in Manama, Bahrain is the Company's
  principal business operation and will be the focus of its development efforts
  during the next two years until it is completed and generating revenue as a
  going concern. Due to its size and scope, the project will require a significant
  amount of capital to be raised in order to ensure that all stages of development
  can be completed on schedule and within budget parameters. The majority of the
  proposed funding will be secured by means of senior debt instruments through
  a consortium of banking, investment and construction institutions together with
  available government financing incentives and concessions.

A secondary source of financing will be from the pre-selling
  of the real estate units, villas and apartments to be constructed as part of
  the 'Dream Island' complex. Advanced negotiations are underway at the present
  time with interested pre-sale real estate companies in Bahrain and Saudi Arabia
  for the commencement of these pre-sales in the near future, continuing through
  the remainder of this fiscal year. Pre-sale funds committed will be held in
  escrow in Bahrain financial institutions pursuant to the sales agreements and
  pending construction stage release.

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

The Board of Directors of the Company, and in particular,
  Mr. Abbas Salih have considerable knowledge and experience in the transaction
  of business in the Middle Eastern regions. Mr. Abbas Salih has undertaken numerous
  projects in the Middle East and Eastern Europe and over the last 20 years has
  established extensive ties with business and investment groups in the Gulf States
  area. Mr. Salih has been stationed in Bahrain and Saudi Arabia for the past
  six months to coordinate the financing and marketing activities and to oversee
  the initial stages of construction on the site. Progress on the resort development
  is expected to accelerate in the second half of fiscal 2003.

The Company's plan during the next quarter and for the remainder
  of fiscal 2003 will not require any additions in staff or office facilities
  at its Vancouver, British Columbia headquarters. There are no plans to hire
  additional employees as administrative requirements at head office are being
  adequately met by the combined efforts of the board members and the permanent
  office staff. Outside consultants are retained on a temporary basis for any
  specialized services. Field operations and construction activities in Bahrain
  will be carried out under the direction of the contractors of record with sub-contracting
  to local trades people as required.

Management of the Company anticipates an increase in operating
  expenses over the next twelve months, as work progresses on the Dream
  Island Resort Project, although the exact amount is not known. The Company
  does not presently have sufficient cash or convertible to cash assets to cover
  these operating expenses. The Company must raise additional working capital
  during the next six to twelve months, which may require the further issuances
  of common shares, preferred shares or convertible debt securities. Management
  is confident that it can continue to secure all required operational funds by
  means of private placements of common shares, short- term loans or sales of
  convertible debt securities to existing shareholders, officers and directors
  and employees of the Company. In the event that the Company must raise funds
  through the public offering of equity shares or convertible debt securities
  then the percentage ownership of its current shareholders would be reduced and
  such share or convertible debt offerings might have rights, preferences or privileges
  senior to its common stock. If adequate funding is not available or is not available
  on acceptable terms, then the Company may not be able to conduct its proposed
  business operations or to continue as a going concern.

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CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1955.

The Company has sought to identify what it believes to be
  the most significant risks to its business, but cannot predict whether or to
  what extent any of such risks may be realized nor can there be any assurances
  that the Company has identified all possible risks that might arise. Investors
  should carefully consider all such risk factors before making an investment
  decision with respect to the Company's stock.

From time to time, the Company will make written and oral
  forward-looking statements about matters that involve risk and uncertainties
  that could cause actual results to differ materially from projected results.

Many of these factors are beyond the Company's ability to
  control and predict. Investors should carefully consider all such risk factors
  before making an investment decision with respect to the Company's stock.

Investors are cautioned not to place undue reliance upon forward-looking
  statements. The Company disclaims any intent or obligation to update its forward-looking
  statements, whether as a result of receiving new information, the occurrence
  of future events, or otherwise.

The Company's common stock is currently quoted on the NASD
  OTC Bulletin Board under the ticker symbol SIII. As of June 30, 2003, there
  were 17,305,596 shares of common stock outstanding. There can be no assurance
  that a trading market will be sustained in the future. Factors such as, but
  not limited to, technological innovations, new products, acquisitions or strategic
  alliances entered into by the Company or its competitors, failure to meet security
  analysts' expectations, government regulatory action, patent or proprietary
  rights developments, and market conditions for development stocks in general
  could have a material effect on the volatility of the Company's stock price.

Item 3. CONTROLS AND PROCEDURES

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

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

| | (a) | On November 28, 2002 a Writ of Summons
        was filed in the Supreme Court of British Columbia against the Company
        and Ralph Shearing, Director and President, as co-Defendants, by BCE Emergis
        Inc., a British Columbia corporation with an office in Vancouver, B.C.,
        as Plaintiff. In the Statement of Claim filed by the Plaintiff as part
        of the Writ, the sum of $11,802.10(Canadian Funds) together with interest
        pursuant to the Court Order Interest Act and Costs are claimed against
        the Defendants for services in the area of press releases, public announcements
        and related marketing matters provided by the Plaintiff on behalf of and
        at the request of the Defendants between January, 2001 and March, 2001.
      The Company is currently negotiating with the Plaintiff
        for a satisfactory resolution of the matter in an effort to avoid or mitigate
        any further legal expenses. A trial date has not been set.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | The Company is not a party to any proceeding
        involving a governmental authority nor is it aware of any matter or cause
        which may be contemplated by any governmental authority as to possible
        proceedings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Except as disclosed above management is not aware of any other
  legal proceedings pending or contemplated against the Company, its directors
  or officers or any of its affiliates. No director, officer or affiliate of the
  Company is (i) a party adverse to the Company in any legal proceeding or (ii)
  has an adverse interest to the Company in any legal proceeding.

ITEM 2. Changes in Securities

| | (a) | none                                                                                                                                                                                                                                                                                                                                   
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                        
| | (b) | 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, but not the obligation, 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 proceeds of the Unit Offering are
        $65,000 which will allocated to working capital. No share purchase warrants
        have been exercised as of the date of this Quarterly Report.
      The 650,000 shares are 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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c) | The Company issued 1,268,750 Class A Convertible
        Preferred Shares. These shares were issued in escrow on January 31, 2003.
        The shares will be released over time as work on the Dream Island Project
        dredging progresses. At June 30, 2003, no value had been recorded for
        the shares as work had not commenced on the project and none of the shares
        have been released from escrow. The Class A convertible preferred shares
        have a par value of $0.001 and are convertible to common shares at either
        $4.00 per share until July 30, 2003, or thereafter at the average of twenty
        consecutive days closing prices which shall not be less than $1.50 per
        share or greater than $6.00 per share.  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | none                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

ITEM 3. Defaults Upon Senior Securities

| | None
| | ----

ITEM 4. Submission of Matters to a Vote of Security Holders

| | None
| | ----

ITEM 5. Other Information

| | None
| | ----

ITEM 6. Exhibits and Reports on Form 8-K

|(a) | Exhibits                                                                                                                           
|--- | -----------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                    
|    | 31.1                                                                                                                               
|    | 31.2                                                                                                                               
|    | 32.1                                                                                                                               
|    | 32.2                                                                                                                               
|    |                                                                                                                                    
|(b) | Reports on Form 8-K
      No reports on Form 8-K were filed by the Company during the six month
        period ended June 30, 2003.

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SIGNATURES

In accordance with the requirements of the Securities and
  Exchange Act of 1934, the Registrant has duly caused this Report to be signed
  on its behalf by the undersigned, thereunto duly authorized.

|                      | STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------- | --------------------------------------------
|                      |                                             
|Date: August 19, 2003 | By:                                         
|                      |                                             
|                      |                                             
|                      |                                             
|                      |                                             
|                      | By:                                         
|                      |                                             
|                      |                                             

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