---

**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

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

For the Quarterly Period ended June 30, 2005

**Strategic Internet Investments, Incorporated**(Small Business Issuer)

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

Check whether the issuer (1) filed all reports required
  to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months,
  and (2) has been subject to such filing requirements for the past 90 days.  Yes
  ý      No
  o

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

Common shares outstanding as of July 31, 2005:24,860,326

Transitional Small Business Disclosure Format.  Yes
  o     No
  ý

PART I  FINANCIAL INFORMATION

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

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

---

1. Financial Statements

STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2005

(Stated in U.S. Dollars)

(Unaudited)

---

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

June 30,
      
      
      December 31,2005
      
      
      2004ASSETSCurrentCash
      $
      797
      
      $
      22,987Prepaid
        expenses
      
      77,842
      
      
      64,03078,639
      
      
      87,017Capital assets
      
      1,944
      
      
      2,286Deferred investment costs  Note 3
      
      34,210
      
      
      34,210$
      114,793
      
      $
      123,513LIABILITIESCurrentAccounts payable
      $
      92,727
      
      $
      110,836Due to related parties
      
      38,637
      
      
      28,752Current portion of loans payable 
        Note 4
      
      151,361
      
      
      183,698282,725
      
      
      323,286Loans payable 
        Note 4
      
      -
      
      
      236,137282,725
      
      
      559,423STOCKHOLDERS DEFICIENCYCapital Stock  Notes 4 and 5Class A Convertible Preferred
        stock, $0.001 par value10,000,000 authorized,
        198,000 outstanding
      
      198
      
      
      198Class B Preferred stock,
        $0.001 par value10,000,000 authorized,
        none outstandingCommon stock, $0.001
        par value100,000,000 authorized24,860,326
        outstanding (2004: 18,972,675 outstanding)
      
      24,859
      
      
      18,971Additional paid-in capital
      
      7,083,729
      
      
      3,937,186Contributed capital
      
      431,127
      
      
      411,727Deficit accumulated
        during the development stage
      
      (7,707,845
      )
      
      (4,803,992
      )(167,932
      )
      
      (435,910
      )$
      114,793
      
      $
      123,513


SEE ACCOMPANYING NOTES

---

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

|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   | Cumulative    
|----------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ---------------- | - | - | ---------- | - | - | --------------
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   | from February 
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   | 28, 1989 (Date
|                                    |   | Three months ended |   |   | Six months ended |   |   | of Inception) to
|                                    |   | June 30,           |   |   | June 30,         |   |   | June 30,        
|                                    |   | 2005               |   |   | 2004             |   |   | 2005             |   |   | 2004       |   |   | 2005          
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|General and Administrative Expenses |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Accounting and audit fees           | $ | 15,057             |   | $ | 19,526           |   | $ | 32,241           |   |   | $ 21,678   |   | $ | 148,361       
|Amortization                        |   | 172                |   |   | 220              |   |   | 343              |   |   | 292        |   |   | 3,154         
|Automobile                          |   | -                  |   |   | 565              |   |   | -                |   |   | 565        |   |   | 565           
|Business promotion                  |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | 213           
|Communications                      |   | 12,039             |   |   | 3,001            |   |   | 14,649           |   |   | 6,239      |   |   | 71,152        
|Consulting fees                     |   | 62,562             |   |   | 8,055            |   |   | 113,125          |   |   | 9,555      |   |   | 2,163,914     
|Interest                            |   | 3,587              |   |   | 5,132            |   |   | 13,348           |   |   | 9,924      |   |   | 64,482        
|Investor relations                  |   | 5,943              |   |   | 8,858            |   |   | 12,117           |   |   | 14,582     |   |   | 88,969        
|Legal fees                          |   | 6,595              |   |   | 1,408            |   |   | 20,400           |   |   | 1,745      |   |   | 134,813       
|Management fees                     |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | 112,932       
|Office and general                  |   | 1,078              |   |   | 4,240            |   |   | 1,786            |   |   | 5,384      |   |   | 133,914       
|Regulatory fees                     |   | 1,115              |   |   | 721              |   |   | 1,293            |   |   | 721        |   |   | 17,580        
|Rent                                |   | 4,823              |   |   | 4,500            |   |   | 9,715            |   |   | 9,053      |   |   | 64,482        
|Transfer agent fees (recovery)      |   | (4,184             | ) |   | 2,244            |   |   | 3,395            |   |   | 3,384      |   |   | 36,534        
|Travel                              |   | 6,812              |   |   | 35,612           |   |   | 22,449           |   |   | 62,503     |   |   | 122,167       
|Non-cash
      compensation charge  |   | 6,300              |   |   | 33,550           |   |   | 19,400           |   |   | 67,100     |   |   | 449,435       
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Loss before the following:          |   | (121,899           | ) |   | (127,632         | ) |   | (264,261         | ) |   | (212,725   | ) |   | (3,612,667)   
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Unauthorized distribution           |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | (69,116)      
|Termination fee                     |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | (792,000)     
|Gain (loss) on foreign exchange     |   | 356                |   |   | -                |   |   | (174             | ) |   | -          |   |   | (3,771)       
|Gain on settlement of debt          |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | 15,464        
|Write-down of advances to           |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|related party                       |   | -                  |   |   | -                |   |   | -                |   |   | -          |   |   | (606,337)     
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Net loss for the period             | $ | (121,543           | ) |   | (127,632         | ) | $ | (264,435         | ) | $ | (212,725   | ) | $ | (5,068,427)   
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Basic loss per share                | $ | (0.00              | ) |   | (0.01            | ) | $ | (0.01            | ) | $ | (0.01      | ) |   |               
|                                    |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|Weighted average number of common   |   |                    |   |   |                  |   |   |                  |   |   |            |   |   |               
|shares outstanding                  |   | 24,781,675         |   |   | 17,433,080       |   |   | 22,987,765       |   |   | 17,791,090 |   |   |               

SEE ACCOMPANYING NOTES

---

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

|                                              |   |                  |   |   |               |   |   | Cumulative from |  
|--------------------------------------------- | - | ---------------- | - | - | ------------- | - | - | --------------- | -
|                                              |   |                  |   |   |               |   |   | February 28,    |  
|                                              |   |                  |   |   |               |   |   | 1989 (Date of   |  
|                                              |   | Six months ended |   |   | Inception) to |  
|                                              |   | June 30,         |   |   | June 30,      |  
|                                              |   | 2005             |   |   | 2004          |   |   | 2005            |  
|Operating Activities                          | $ | (264,435         | ) | $ | (212,725      | ) | $ | (5,068,427      | )
|Net loss for the period                       |   |                  |   |   |               |   |   |                 |  
|Adjustments to reconcile net loss to net      |   |                  |   |   |               |   |   |                 |  
|cash used in operations:                      |   |                  |   |   |               |   |   |                 |  
|Amortization                                  |   | 343              |   |   | 292           |   |   | 3,154           |  
|Communications                                |   | 8,000            |   |   | -             |   |   | 8,000           |  
|Consulting fees                               |   | 113,125          |   |   | -             |   |   | 2,043,929       |  
|Gain
      on settlement of debt              |   | -                |   |   | -             |   |   | (15,464         | )
|Legal fees                                    |   | 8,617            |   |   | -             |   |   | 10,602          |  
|Management
      fees                         |   | -                |   |   | -             |   |   | 7,000           |  
|Write-down of
      advances to related party |   | -                |   |   | -             |   |   | 606,337         |  
|Non-cash
      compensation charge            |   | 19,400           |   |   | 67,100        |   |   | 449,435         |  
|Termination
      fees                        |   |                  |   |   | -             |   |   | 792,000         |  
|Changes in non-cash items:                    |   |                  |   |   |               |   |   |                 |  
|Prepaid expenses                              |   | 1,960            |   |   | -             |   |   | (820            | )
|Accounts
      payable                        |   | 23,076           |   |   | (44,101       | ) |   | 246,197         |  
|Due to/from
      related parties, net        |   | 9,885            |   |   | 3,119         |   |   | 38,637          |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Net cash used in operating activities         |   | (80,029          | ) |   | (186,315      | ) |   | (879,420        | )
|                                              |   |                  |   |   |               |   |   |                 |  
|Investing Activities                          |   |                  |   |   |               |   |   |                 |  
|Organization costs                            |   | -                |   |   | -             |   |   | (750            | )
|Advance to related party                      |   | -                |   |   | -             |   |   | (606,337        | )
|Acquisition of capital assets                 |   | -                |   |   | (2,069        | ) |   | (4,347          | )
|Deferred investment costs                     |   | -                |   |   | -             |   |   | (34,210         | )
|                                              |   |                  |   |   |               |   |   |                 |  
|Net cash used in investing activities         |   | -                |   |   | (2,069        | ) |   | (645,644        | )
|                                              |   |                  |   |   |               |   |   |                 |  
|Financing Activities                          |   |                  |   |   |               |   |   |                 |  
|Increase (decrease) in loans payable          |   | (18,314          | ) |   | 140,562       |   |   | 495,058         |  
|Proceeds from issuance of common stock        |   | 76,153           |   |   | 49,750        |   |   | 1,032,631       |  
|Payment of offering costs                     |   | -                |   |   | -             |   |   | (27,270         | )
|Contributed capital                           |   | -                |   |   | -             |   |   | 25,442          |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Net cash provided by financing activities     |   | 57,839           |   |   | 190,312       |   |   | 1,525,861       |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Increase (decrease) in cash during the period |   | (22,190          | ) |   | 1,928         |   |   | 797             |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Cash, beginning of the period                 |   | 22,987           |   |   | 346           |   |   | -               |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Cash, end of the period                       | $ | 797              |   | $ | 2,274         |   | $ | 797             |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Supplementary disclosure of cash flows:       |   |                  |   |   |               |   |   |                 |  
|Cash paid for Interest                        | $ | 10,403           |   | $ | -             |   | $ | 17,054          |  
|                                              |   |                  |   |   |               |   |   |                 |  
|Cash paid for Income taxes                    | $ | -                |   | $ | -             |   | $ | -               |  
|Non cash Transactions  Note 6                |   |                  |   |   |               |   |   |                 |  

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY 
  For the period from February 28, 1989 (Date of Inception) to June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         | Deficit     |   |         |         |  
|------------------------------------ | ---------- | --------------- | - | ------------ | --------- | ------ | ------- | - | -- | ----------- | - | ------ | ----------- | - | - | ------- | - | ------- | ----------- | - | ------- | ------- | -
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         | Accumulated |   |         |         |  
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        | Additional  |   |   |         |   |         | During the  |   |         |         |  
|                                     |            | Preferred Stock |   | Common Stock |           |        | Paid-In |   |    | Contributed |   |        | Development |   |   |         |  
|                                     |            | Shares          |   |              | Par Value |        | 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                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   |         |   |         | (84,159     | ) |         | (84,159 | )
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |         |  
|Balance, December 31, 1990           | -          |                 |   | -            |           | 66,695 |         |   | 66 |             |   | 82,664 |             |   | - |         |   | (84,159 | )           |   | (1,429  | )      
|Net loss                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | -       |   |         | (3,416      | ) |         | (3,416  | )
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |         |  
|Balance, December 31, 1991           | -          |                 |   | -            |           | 66,695 |         |   | 66 |             |   | 82,664 |             |   | - |         |   | (85,575 | )           |   | (4,845  | )      
|Net loss                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | -       |   |         | (2,713      | ) |         | (2,713  | )
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |         |  
|Balance, December 31, 1992           | -          |                 |   | -            |           | 66,695 |         |   | 66 |             |   | 82,664 |             |   | - |         |   | (90,288 | )           |   | (7,558  | )      
|Net loss                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | -       |   |         | (1,614      | ) |         | (1,614  | )
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |         |  
|Balance, December 31, 1993           | -          |                 |   | -            |           | 66,695 |         |   | 66 |             |   | 82,664 |             |   | - |         |   | (91,902 | )           |   | (9,172  | )      
|Net loss                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | -       |   |         | (1,863      | ) |         | (1,863  | )
|                                     |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |         |  
|Balance December 31, 1994            | -          |                 |   | -            |           | 66,695 |         |   | 66 |             |   | 82,664 |             |   | - |         |   | (93,765 | )           |   | (11,035 | )      
|Issuance of stock for services       |            |                 |   |              |           |        |         |   |    |             |   |        |             |   |   |         |   |         |             |   |         |        
|rendered                             |  at $0.03 | -               |   |              | -         |        | 50,000  |   |    | 50          |   |        | 1,450       |   |   | -       |   |         | -           |   |         | 1,500   |  
|Contributed capital                  |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | 24,842  |   |         | -           |   |         | 24,842  |  
|Net loss                             |            | -               |   |              | -         |        | -       |   |    | -           |   |        | -           |   |   | -       |   |         | (16,735     | ) |         | (16,735 | )

Contd

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY 
  For the period from February 28, 1989 (Date of Inception) to June 30, 2005 
  (Stated in U.S. Dollars)
  (Unaudited)

|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          | Deficit     |   |         |          |  
|------------------------------- | ----------- | - | --------------- |  | - | ------------ |  | --------- | --------- |  | ----- | ----------- |  | ------- | ----------- |  | ------ | ------- |  | -------- | ----------- | - | ------- | -------- | -
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          | Accumulated |   |         |          |  
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         | Additional  |  |        |         |  |          | During the  |   |         |          |  
|                                |             |   | Preferred Stock |  |   | Common Stock |  |           | Paid-In   |  |       | Contributed |  |         | Development |  |        |         | 
|                                |             |   | Shares          |  |   | Par Value    |  |           | Shares    |  |       | Par Value   |  |         | Capital     |  |        | Capital |  |          | Stage       |   |         | Total    |  
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |          |  
|Balance, December 31, 1995      |             |   | -               |  |   | -            |  |           | 116,695   |  |       | 116         |  |         | 84,114      |  |        | 24,842  |  |          | (110,500    | ) |         | (1,428   | )
|Net loss                        |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | -       |  |          | (9,068      | ) |         | (9,068   | )
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |          |  
|Balance December 31, 1996       |             |   | -               |  |   | -            |  |           | 116,895   |  |       | 116         |  |         | 84,114      |  |        | 24,842  |  |          | (119,568    | ) |         | (10,496  | )
|Issuance of stock for cash      | - $0.011    |   | -               |  |   | -            |  |           | 2,000,000 |  |       | 2,000       |  |         | 19,300      |  |        | -       |  |          | -           |   |         | 21,300   |  
|Contributed capital             |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | 600     |  |          | -           |   |         | 600      |  
|Net loss                        |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | -       |  |          | (22,261     | ) |         | (22,261  | )
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |          |  
|Balance, December 31, 1997      |             | - |                 |  | - |              |  | 2,116,695 |           |  | 2,116 |             |  | 103,414 |             |  | 25,442 |         |  | (141,829 | )           |   | (10,857 | )       
|Issuance of stock services      |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |         
|                                | - at $0.001 |   | -               |  |   | -            |  |           | 7,000,000 |  |       | 7,000       |  |         | -           |  |        | -       |  |          | -           |   |         | 7,000    |  
|                                | - at $0.01  |   | -               |  |   | -            |  |           | 620,000   |  |       | 620         |  |         | 5,580       |  |        | -       |  |          | -           |   |         | 6,200    |  
|Net loss                        |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | -       |  |          | (52,308     | ) |         | (52,308  | )
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |          |  
|Balance, December 31, 1998      |             | - |                 |  | - |              |  | 9,736,695 |           |  | 9,736 |             |  | 108,994 |             |  | 25,442 |         |  | (194,137 | )           |   | (49,965 | )       
|Net loss                        |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | -       |  |          | (35,995     | ) |         | (35,995  | )
|                                |             |   |                 |  |   |              |  |           |           |  |       |             |  |         |             |  |        |         |  |          |             |   |         |          |  
|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                        |             |   | -               |  |   | -            |  |           | -         |  |       | -           |  |         | -           |  |        | -       |  |          | (336,431    | ) |         | (336,431 | )
|Non-cash compensation charge    |             | - |                 |  | - |              |  | -         |           |  | -     |             |  | -       |             |  | 78,707 |         |  | -        |             |   | 78,707  |         

Contd

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY 
  For the period from February 28, 1989 (Date of Inception) to June 30, 2005
  (Stated in U.S. Dollars) 
  (Unaudited)

|                                          |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   | Deficit     |   |         |            |  
|----------------------------------------- | ------------ | - | --------------- |  | - | ------------ |  | ------- | ---------- |  | --- | ----------- |  | ------- | ----------- | - | ------- | ------- |  | - | ----------- | - | ------- | ---------- | -
|                                          |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   | Accumulated |   |         |            |  
|                                          |              |   |                 |  |   |              |  |         |            |  |     |             |  |         | Additional  |   |         |         |  |   | During the  |   |         |            |  
|                                          |              |   | Preferred Stock |  |   | Common Stock |  |         | Paid-In    |  |     | Contributed |  |         | Development |   |         |         | 
|                                          |              |   | Shares          |  |   | Par Value    |  |         | Shares     |  |     | Par Value   |  |         | Capital     |   |         | Capital |  |   | Stage       |   |         | Total      |  
|                                          |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   |             |   |         |            |  
|Balance December 31, 2000                 |              |   | -               |  |   | -            |  |         | 10,920,029 |  |     | 10,919      |  |         | 447,811     |   |         | 104,149 |  |   | (566,563    | ) |         | (3,684     | )
|Issuance of stock for services - at $0.50 |              | - |                 |  | - |              |  | 328,356 |            |  | 328 |             |  | 163,851 |             |   | -       |         |  | - |             |   | 164,179 |           
|                                          | - at $1.55   |   | -               |  |   | -            |  |         | 13,383     |  |     | 13          |  |         | 20,731      |   |         | -       |  |   | -           |   |         | 20,744     |  
|                                          | - at $3.50   |   | -               |  |   | -            |  |         | 366,667    |  |     | 367         |  |         | 1,282,964   |   |         | -       |  |   | -           |   |         | 1,283,331  |  
|Issuance of stock for cash pursuant to a  |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   |             |   |         |           
|private placement                         | - at $0.30   |   | -               |  |   | -            |  |         | 883,332    |  |     | 883         |  |         | 264,117     |   |         | -       |  |   | -           |   |         | 265,000    |  
|Issuance of stock pursuant to the         |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   |             |   |         |           
|exercise
      of warrants                | - at $2.00   |   | -               |  |   | -            |  |         | 28,800     |  |     | 29          |  |         | 57,571      |   |         | -       |  |   | -           |   |         | 57,600     |  
|Less: Issue costs                         |              |   | -               |  |   | -            |  |         | -          |  |     | -           |  |         | (17,858     | ) |         | -       |  |   | -           |   |         | (17,858    | )
|Net loss                                  |              |   | -               |  |   | -            |  |         | -          |  |     | -           |  |         | -           |   |         | -       |  |   | (2,296,406  | ) |         | (2,296,406 | )
|Non-cash compensation charge              |              | - |                 |  | - |              |  | -       |            |  | -   |             |  | -       |             |   | 136,378 |         |  | - |             |   | 136,378 |           
|                                          |              |   |                 |  |   |              |  |         |            |  |     |             |  |         |             |   |         |         |  |   |             |   |         |            |  
|Balance, December 31, 2001                |              |   | -               |  |   | -            |  |         | 12,540,567 |  |     | 12,539      |  |         | 2,219,187   |   |         | 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                                  |              |   | -               |  |   | -            |  |         | -          |  |     | -           |  |         | -           |   |         | -       |  |   | (214,758    | ) |         | (214,758   | )

Contd

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY 
  For the period from February 28, 1989 (Date of Inception) to June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|                                                       |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  | Deficit     |   |  |            |  
|------------------------------------------------------ | ---------------- |  | ---------------------- |  |  | ------------ |  |  | ---------- | - |  | ----------- | - |  | ----------- | - |  | ------- | - |  | ----------- | - |  | ---------- | -
|                                                       |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  | Accumulated |   |  |            |  
|                                                       |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  | Additional  |   |  |         |   |  | During the  |   |  |            |  
|                                                       |                  |  | Preferred Stock        |  |  | Common Stock |  |  | Paid-In    |   |  | Contributed |   |  | Development |   |  |         |  
|                                                       |                  |  | Shares Par
      Value |  |  | Shares       |  |  | Par Value  |   |  | Capital     |   |  | Capital     |   |  | Stage   |   |  | Total       |  
|                                                       |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |            |  
|Balance, December 31, 2002                             |                  |  | -                      |  |  | -            |  |  | 15,205,596 |   |  | 15,204      |   |  | 2,550,928   |   |  | 240,527 |   |  | (3,077,727  | ) |  | (271,068   | )
|Non-cash compensation charge                           |                  |  | -                      |  |  | -            |  |  | -          |   |  | -           |   |  | -           |   |  | 53,500  |   |  | -           |   |  | 53,500     |  
|Issue of stock for services                            |  at $0.14       |  | -                      |  |  | -            |  |  | 1,450,000  |   |  | 1,450       |   |  | 201,550     |   |  | -       |   |  | -           |   |  | 203,000    |  
|Issue of stock for cash pursuant to a private          |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |           
|placement                                              | 
      at $0.10 |  | -                      |  |  | -            |  |  | 65,000     |   |  | 650         |   |  | 64,350      |   |  | -       |   |  | -           |   |  | 65,000     |  
|Net loss                                               |                  |  | -                      |  |  | -            |  |  | -          |   |  | -           |   |  | -           |   |  | -       |   |  | (1,208,941  | ) |  | (1,208,941 | )
|Issued for termination fee                             |                  |  | 198,000                |  |  | 198          |  |  | -          |   |  | -           |   |  | 791,802     |   |  | -       |   |  | -           |   |  | 792,000    |  
|                                                       |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |            |  
|Balance, December 31, 2003                             |                  |  | 198,000                |  |  | 198          |  |  | 17,305,596 |   |  | 17,304      |   |  | 3,608,630   |   |  | 294,027 |   |  | (4,286,668  | ) |  | (366,509   | )
|Non-cash compensation charge                           |                  |  | -                      |  |  | -            |  |  | -          |   |  | -           |   |  | -           |   |  | 161,450 |   |  | -           |   |  | 161,450    |  
|Stock-based compensation
      on the exercise of      |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |           
|options                                                |                  |  | -                      |  |  | -            |  |  | -          |   |  | -           |   |  | 43,750      |   |  | (43,750 | ) |  | -           |   |  | -          |  
|Issue of stock for cash
      pursuant to the exercise |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |           
|of share purchase warrants                             |  at $0.10       |  | -                      |  |  | -            |  |  | 320,000    |   |  | 320         |   |  | 31,680      |   |  | -       |   |  | -           |   |  | 32,000     |  
|                                                       |  at $0.05       |  | -                      |  |  | -            |  |  | 643,715    |   |  | 644         |   |  | 31,542      |   |  | -       |   |  | -           |   |  | 32,186     |  
|Issue of stock for cash pursuant to the
      exercise |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |           
|of share purchase
      options                        |  at $0.25       |  | -                      |  |  | -            |  |  | 205,000    |   |  | 205         |   |  | 51,045      |   |  | -       |   |  | -           |   |  | 51,250     |  
|Issue of stock for debt                                |  at $0.05       |  | -                      |  |  | -            |  |  | 563,000    |   |  | 563         |   |  | 29,437      |   |  | -       |   |  | -           |   |  | 30,000     |  
|                                                       |  at $0.06       |  | -                      |  |  | -            |  |  | 825,364    |   |  | 825         |   |  | 47,712      |   |  | -       |   |  | -           |   |  | 48,537     |  
|                                                       |  at $0.30       |  | -                      |  |  | -            |  |  | 50,000     |   |  | 50          |   |  | 14,950      |   |  | -       |   |  | -           |   |  | 15,000     |  
|Issuance of stock for services                         |  at $2.00       |  | -                      |  |  | -            |  |  | 10,000     |   |  | 10          |   |  | 19,990      |   |  | -       |   |  | -           |   |  | 20,000     |  
|                                                       |  at $0.35       |  | -                      |  |  | -            |  |  | 350,000    |   |  | 350         |   |  | 122,150     |   |  | -       |   |  | -           |   |  | 122,500    |  
|Cancellation of stock issued
      for deferred        |                  |  |                        |  |  |              |  |  |            |   |  |             |   |  |             |   |  |         |   |  |             |   |  |           
|Investment costs                                       |  at $0.05       |  |                        |  |  |              |  |  | (1,300,000 | ) |  | (1,300      | ) |  | (63,700     | ) |  | -       |   |  | -           |   |  | (65,000    | )
|Net loss                                               |                  |  | -                      |  |  | -            |  |  | -          |   |  | -           |   |  | -           |   |  | -       |   |  | (517,324    | ) |  | (517,324   | )

Contd

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY 
  For the period from February 28, 1989 (Date of Inception) to June 30, 2005 
  (Stated in U.S. Dollars)
  (Unaudited)

|                                                 |            |                  |   |     |              |  |            |            |   |        |             |   |           |             |   |         |         |   |            | Deficit     |   |          |          |  
|------------------------------------------------ | ---------- | ---------------- | - | --- | ------------ |  | ---------- | ---------- | - | ------ | ----------- | - | --------- | ----------- | - | ------- | ------- | - | ---------- | ----------- | - | -------- | -------- | -
|                                                 |            |                  |   |     |              |  |            |            |   |        |             |   |           |             |   |         |         |   |            | Accumulated |   |          |          |  
|                                                 |            |                  |   |     |              |  |            |            |   |        |             |   |           | Additional  |   |         |         |   |            | During the  |   |          |          |  
|                                                 |            | Preferred Stock  |   |     | Common Stock |  |            | Paid-In    |   |        | Contributed |   |           | Development |   |         |         |  
|                                                 |            | Shares Par Value |   |     | Shares       |  |            | Par Value  |   |        | Capital     |   |           | Capital     |   |         | Stage   |   |            | Total       |  
|                                                 |            |                  |   |     |              |  |            |            |   |        |             |   |           |             |   |         |         |   |            |             |   |          |         
|Balance, December 31, 2004                       |            | 198,000          |   | $   | 198          |  |            | 18,972,675 |   | $      | 18,971      |   | $         | 3,937,186   |   | $       | 411,727 |   | $          | (4,803,992  | ) | $        | (435,910 | )
|Non-cash compensation charge                     | -          |                  |   | -   |              |  | -          |            |   | -      |             |   | -         |             |   | 19,400  |         |   | -          |             |   | 19,400   |         
|Issue of stock for cash pursuant to the exercise |            |                  |   |     |              |  |            |            |   |        |             |   |           |             |   |         |         |   |            |             |   |          |         
|of share purchase
      warrants                 |  at $0.07 | -                |   |     | -            |  |            | 75,820     |   |        | 76          |   |           | 5,232       |   |         | -       |   |            | -           |   |          | 5,308    |  
|                                                 |  at $0.10 | -                |   |     | -            |  |            | 357,760    |   |        | 357         |   |           | 35,418      |   |         | -       |   |            | -           |   |          | 35,775   |  
|                                                 |  at $0.11 | -                |   |     | -            |  |            | 299,724    |   |        | 300         |   |           | 31,270      |   |         | -       |   |            | -           |   |          | 31,570   |  
|                                                 |  at $0.21 | -                |   |     | -            |  |            | 16,803     |   |        | 17          |   |           | 3,483       |   |         | -       |   |            | -           |   |          | 3,500    |  
|Issue of stock for debt                          |  at $0.39 | -                |   |     | -            |  |            | 635,901    |   |        | 636         |   |           | 249,524     |   |         | -       |   |            | -           |   |          | 250,160  |  
|Issuance of stock for services                   |  at $0.25 | -                |   |     | -            |  |            | 150,000    |   |        | 150         |   |           | 37,350      |   |         | -       |   |            | -           |   |          | 37,500   |  
|                                                 |  at $0.36 | -                |   |     | -            |  |            | 100,000    |   |        | 100         |   |           | 35,900      |   |         | -       |   |            | -           |   |          | 36,000   |  
|                                                 |  at $0.50 | -                |   |     | -            |  |            | 121,000    |   |        | 121         |   |           | 60,379      |   |         | -       |   |            | -           |   |          | 60,500   |  
|                                                 |  at $0.54 | -                |   |     | -            |  |            | 20,000     |   |        | 20          |   |           | 10,680      |   |         | -       |   |            | -           |   |          | 10,700   |  
|                                                 |  at $0.84 | -                |   |     | -            |  |            | 50,000     |   |        | 50          |   |           | 41,950      |   |         | -       |   |            | -           |   |          | 42,000   |  
|Issuance of stock dividend                       |  at $0.65 | -                |   |     | -            |  |            | 4,060,643  |   |        | 4,061       |   |           | 2,635,357   |   |         | -       |   |            | (2,639,418  | ) |          | -        |  
|Net loss                                         |            | -                |   |     | -            |  |            | -          |   |        | -           |   |           | -           |   |         | -       |   |            | (264,435    | ) |          | (264,435 | )
|                                                 |            |                  |   |     |              |  |            |            |   |        |             |   |           |             |   |         |         |   |            |             |   |          |          |  
|Balance, June 30,
      2005                     | 198,000    |                  | $ | 198 |              |  | 24,860,326 |            | $ | 24,859 |             | $ | 7,083,729 |             | $ | 431,127 |         | $ | (7,707,845 | )           | $ | (167,932 | )       

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|1. | Interim Reporting and Continuation of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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, 2004, as filed with the United States Securities and Exchange Commission.                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The results of operations for the six months ended June 30, 2005 are not indicative of the results that may be expected for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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, 2005, the Company has a working capital deficiency of $204,086, which is not sufficient to meet its planned business objectives or ongoing operations for the next fiscal year, has
not yet attained profitable operations and has accumulated losses of $7,707,845 since its inception. The ability of the Company to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the
future and/or arranging the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise
substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable
to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | 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 3851630 Canada Inc. Both of these subsidiary companies are dormant
and were incorporated by the Company in March 2001. All significant inter- company transactions were eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Deferred Investment Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Deferred investment costs consist of consultants fees and payments to reimburse Star Leisure and Entertainment Inc. with respect to the acquisition of Gulf Star World Development W.L.L. (Note 5).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|4. | Loans Payable Note 5
|-- | ---------------------

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | June 30, |   |   | December 31, |  
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------- | - | - | ------------ | -
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | 2005     |   |   | 2004         |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | a) | Loan payable to a company controlled
        by a director of the Company including accrued interest of $195 (2004:
        $9,198) The loan is unsecured, bearing interest at 12% per annum and is
        repayable no later than August 12, 2005.                                                                                                                                                                                                                                                                                                                                                                                                          |  | $ | 6,996    |   | $ | 29,198       |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | b) | Loan payable to a shareholder including
        accrued interest of $3,008 (2004: $2,658). The loan is unsecured, bears
        interest at 8% per annum and is repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   | 9,043    |   |   | 8,693        |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | c) | Loan payable to a company controlled
        by a director of the Company. The loan is unsecured, non-interest bearing
        and is repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |   | 4,653    |   |   | -            |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | d) | Loan payable to a company controlled
        by a director of the Company including accrued interest of $255 (2004:
        $52) The loan is unsecured, bearing interest at 10% per annum and is repayable
        upon demand. This loan and accrued interest is payable in Canadian funds
        in the amount of Cdn$10,277.                                                                                                                                                                                                                                                                                                                              |  |   | 8,594    |   |   | 17,652       |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | e) | Loans payable to a company controlled
        by a shareholder of the Company, including accrued interest payable of
        $NIL (2004: $20,914), pursuant to Convertible Loan Agreements. Interest
        is calculated at 10% per annum. The loans mature on various dates to September
        23, 2006. The lender may at anytime convert the principal sum plus accrued
        interest into units of the Company. Each unit will consist of one common
        share plus one common share purchase warrant. In January 2005 this loan
        and accrued interest was converted into 635,901 units at an average price
        of $0.39 per share. |  |   | -        |   |   | 248,053      |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| | f) | Loans payable to a company controlled
        by a director of the Company, including accrued interest of $18,869 (2004:
        $13,033), pursuant to Convertible Loan Agreements. Interest is calculated
        at 10% per annum. The loans mature on various dates to January 31, 2006.
        The lender may at anytime convert the principal sum plus accrued interest
        into units of the Company. Each unit will consist of one common share
        plus one common share purchase warrant. Conversion of this loan and associated
        warrants to equity will be at various rates ranging from $0.11 to $0.20
        per share.         |  |   | 122,075  |   |   | 116,239      |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   |          |   |   |              |  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |   | 151,361  |   |   | 419,835      |  
| |    | Less:
      current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | (151,361 | ) |   | (183,698     | )
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | $ | -        |   | $ | 236,137      |  

Pursuant to the terms of the Convertible Loan Agreements,
  the exercise price and number of shares were adjusted as a result of a 20% stock
  dividend granted by the Company on March 4, 2005.

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|5. | Capital Stock Notes 4 and 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 $4.00 per share during
      the first 180 days following issuance, and thereafter at the average of
      twenty consecutive days closing prices, but shall not be less than $1.50
      per share or greater than $6.00 per share. The Company has the right to
      redeem its Class A convertible preferred stock at any time by paying to
      the holders thereof the sum of $4 per share.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys board of directors approved a stock option
      plan. Under the plan directors, employees and consultants may be granted
      options to purchase common stock of the Company at a price of not less
      than 100% of the fair market value of the stock. The total number of
      options granted must not exceed 15% of the outstanding common stock of the
      Company. The plan expires on July 1, 2017.                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company granted share purchase options to directors,
      employees and consultants of the Company at the closing price of the
      Companys common stock on the date of the grants. The options have been
      granted with a term of 5 years. The stock options are exercisable at 20%
      on the date of grant, and then 20% every three months thereafter, such
      that they are fully exercisable after a period of one year from the date
      of grant.                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the period ended June 30, 2005, the share purchase
      options outstanding is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                                            |                         |  |  |           |   |   | Weighted       | 
| | ------------------------------------------ | ----------------------- |  |  | --------- | - | - | -------------- | 
| |                                            |                         |  |  |           |   |   | Average        | 
| |                                            | Expiry                  |  |  | Shares    |   |   | Exercise Price | 
| |                                            |                         |  |  |           |   |   |                | 
| |                                            | September 5, 2008       |  |  | 1,872,000 |   | $ | 0.21           | 
| |                                            | February 5, 2009        |  |  | 120,000   |   | $ | 0.29           | 
| |                                            | April 15, 2009          |  |  | 30,000    |   | $ | 0.53           | 
| |                                            | July 8, 2009            |  |  | 108,000   |   | $ | 0.33           | 
| |                                            |                         |  |  |           |   |   |                | 
| | Options outstanding at December 31, 2004   |                         |  |  | 2,130,000 |   | $ | 0.22           | 
| | Cancelled
      during the period          | September
      5, 2008 |  |  | (120,000  | ) | $ | 0.21           | 
| |                                            |                         |  |  |           |   |   |                | 
| | Options
      outstanding at June 30, 2005 |                         |  |  | 2,010,000 |   | $ | 0.22           | 

| |                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to the terms of the Stock Option Plan, the exercise
        price and number of shares were adjusted as a result of a 20% stock dividend
        granted by the Company on March 4, 2005.
      At June 30, 2005, of the total outstanding share purchase
        options, 1,988,400 (December 31, 2004: 2,029,200) were exercisable.

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                              
|   | Commitments  (contd)                                                                                                                                       
|   |                                                                                                                                                              
|   | Stock-based Compensation  (contd)                                                                                                                          
|   |                                                                                                                                                              
|   | As the stock options have a graded vesting schedule, the
      total compensation cost recognized for the six months ended June 30, 2005
      is as follows:

| |                                    |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | Cumulative     |  
| | ---------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ---------------- | - | - | -------- | - | - | -------------- | -
| |                                    |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | from February  |  
| |                                    |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | 28, 1989 (Date |  
| |                                    |   | Three months ended |   |   | Six months ended |   |   | of Inception) to |  
| |                                    |   | June 30,           |   |   | June 30,         |   |   | June 30,         |  
| |                                    |   | 2005               |   |   | 2004             |   |   | 2005             |   |   | 2004     |   |   | 2005           |  
| | Total non-cash compensation        |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | charge vested                      | $ | 9,100              |   | $ | 97,850           |   | $ | 25,000           |   | $ | 192,900  |   | $ | 949,357        |  
| | Employees non-cash                |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | compensation charge                |   | (2,800             | ) |   | (64,300          | ) |   | (5,600           | ) |   | (125,800 | ) |   | (499,922       | )
| |                                    |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | Consultants non-cash compensation |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | charge recognized                  | $ | 6,300              |   | $ | 33,550           |   | $ | 19,400           |   | $ | 67,100   |   | $ | 449,435        |  

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

| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | Cumulative     |  
| | -------------------- | ----------- | - | ------------------ | - | - | ---------------- | - | - | ---------------- | - | - | -------- | - | - | -------------- | -
| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | from February  |  
| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   | 28, 1989 (Date |  
| |                      |             |   | Three months ended |   |   | Six months ended |   |   | of Inception) to |  
| |                      |             |   | June 30,           |   |   | June 30,         |   |   | June 30,         |  
| |                      |             |   | 2005               |   |   | 2004             |   |   | 2005             |   |   | 2004     |   |   | 2005           |  
| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | Net loss             | As reported | $ | (121,543           | ) | $ | (127,632         | ) | $ | (264,435         | ) | $ | (212,725 | ) | $ | (5,068,427     | )
| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| |                      | Pro-forma   | $ | (124,343           | ) | $ | (191,932         | ) | $ | (270,035         | ) | $ | (338,525 | ) | $ | (5,568,349     | )
| |                      |             |   |                    |   |   |                  |   |   |                  |   |   |          |   |   |                |  
| | Basic loss per share | As reported | $ | (0.00              | ) | $ | (0.01            | ) | $ | (0.01            | ) | $ | (0.01    | ) |   | -              |  
| |                      | Pro-forma   | $ | (0.01              | ) | $ | (0.01            | ) | $ | (0.01            | ) | $ | (0.02    | ) |   | -              |  

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                         
|   | Commitments  (contd)                                                                                                                                                  
|   | Stock-based Compensation  (contd)                                                                                                                                     
|   |                                                                                                                                                                         
|   | The fair value of each option grant was estimated on
        the date of the grant using the Black-Scholes option- pricing model with
        the following assumptions:

| |                         | 2004     
| | ----------------------- | ---------
| |                         |          
| | Expected dividend yield | 0.0%     
| | Expected volatility     | 142%-191%
| | Risk-free Interest Rate | 2%-2.88% 
| | Expected term in years  | 5        

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Black-Scholes option pricing model requires the input
        of highly subjective assumptions including the expected price volatility.
        Changes in the subjective input assumptions can materially affect the
        fair value estimate and therefore the Black-Scholes model does not necessarily
        provide a reliable single measure of the fair value of the Companys
        share purchase options.
      Share Purchase Warrants
      At June 30, 2005, the following share purchase warrants
        were outstanding:

| |  | Number
      of Warrants |  | Exercise
      Price |  | Expiry Date            | 
| |  | ------------------------ |  | -------------------- |  | ---------------------- | 
| |  |                          |  |                      |  |                        | 
| |  | 9,592                    |  | $0.21                |  | February 1, 2006       | 
| |  | 114,428                  |  | $0.23                |  | March 1, 2006          | 
| |  | 43,500                   |  | $0.25                |  | April 1, 2006          | 
| |  | 10,126                   |  | $0.50                |  | May 1, 2006            | 
| |  | 55,264                   |  | $0.63                |  | May 1, 2006            | 
| |  | 22,500                   |  | $0.67                |  | June 1, 2006           | 
| |  | 131,507                  |  | $0.61                |  | July 1, 2006           | 
| |  | 8,824                    |  | $0.57                |  | July 1, 2006           | 
| |  | 26,939                   |  | $0.41                |  | September 1, 2006      | 
| |  | 21,510                   |  | $0.44                |  | October 1, 2006        | 
| |  | 96,047                   |  | $0.24                |  | January
      31, 2007 | 
| |  |                          |  |                      |  |                        | 
| |  | 540,237                  |  |                      |  |                        | 

| |                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Each warrant entitles the holder thereof the right to
        purchase one common share at the prices as indicated above.
      Pursuant to the terms of the share purchase warrant agreements,
        the exercise price and number of shares were adjusted as a result of a
        20% stock dividend granted by the Company on March 4, 2005.

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Acquisition of Gulf Star World Development W.L.L.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | By a letter of agreement dated July 11, 2002, amended October 10, 2002, May 10, 2003, September 30, 2003, and June 30, 2004 the Company agreed to purchase 80% of the outstanding shares of Gulf Star World Development W.L.L.
(Gulf Star), a Bahrain corporation, from Star Leisure & Entertainment Inc. (Star Leisure). Star Leisure is controlled by a director of the Company and is based in British Columbia, Canada. Gulf Star is the 100% owner and
developer of the residential and tourist project known as the Dream Island Resort, located on the north coast of Bahrain at Manama City.                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | To acquire 80% of Gulf Star, the Company must issue five million common shares at a price of $0.125 per share. The shares are to be issued over a three-year period as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In addition, the Company shall make cash payments to Star Leisure totaling $100,000 to cover a portion of hard costs accumulated by Star Leisure in progressing the Dream Island Project. During the year ended December 31, 2003,
the Company paid $34,210 as partial payment toward the $100,000 payment. The remaining balance of $65,790 is due on or before August 31, 2006. The Company has also agreed to reimburse Star Leisure and Jzala Investment Group (20%
shareholder of Gulf Star) for costs to be verified that they may have incurred upon the project financing being fully secured and having released in sufficient amounts to commence the main construction.                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On August 9, 2002, the Company entered into an assignment agreement, whereby the Company was assigned all rights and obligations under a Dredging and Reclamation Contract entered into by Star Leisure pertaining to the construction
of The Dream Island Resort project. Under the terms of the Dredging and Reclamation contract, the Company issued 1,268,750 Class A Convertible Preferred shares, with a deemed value of $5,075,000, as full payment due under this contract. These
shares were issued in escrow, and will be released in stages as the dredging contract progresses. At June 30, 2005, 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In August 2004 work commenced on the Dream Island Project, however there has not yet been sufficient progress to warrant a release of escrowed shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2005 
  (Stated in U.S. Dollars) 
  (Unaudited)

|5. | Capital Stock Notes 4 and 7  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Financial Consulting Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Pursuant to the terms of a consulting agreement dated
      January 6, 2005 for financial and business promotional services for a term
      of six months commencing January 6, 2005, the Company issued 400,000
      common shares at a fair value of $0.25 per share for a total consideration
      of $100,000. 250,000 of these shares are held in escrow and are to be
      released upon the Companys share price closing at $2.50, as to the
      release of 150,000 shares, and at $5.00, as to the release of 100,000
      shares. The Company recorded the fair value of the 150,000 shares issued
      as $37,500 as a consulting expense.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Pursuant to the terms of a 6 month consulting agreement
      dated March 9, 2005 for business promotional services, the Company agreed
      to issue 100,000 common shares at a fair value of $0.36 per share for a
      total consideration of $36,000. The Company recorded the fair value of the
      100,000 shares issued as $36,000, of which $24,000 was recorded as a
      consulting expense and $12,000 as a prepaid expense.                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | Non-Cash Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Investing and financing activities that do not have a
      direct impact on cash flows are excluded from the statement of cash flows.
      The Company issued common shares for settlement of debts, convertible
      loans, and for services provided to the Company during the following
      years:                                                                                                                                                                                                                                                                                                                                                   

| |      |                                         | Number of |  |  | Number of  |   | Weighted      |       |  |       |          
| | ---- | --------------------------------------- | --------- |  |  | ---------- | - | ------------- | ----- |  | ----- | ---------
| |      |                                         | Preferred |  |  | Common     |   | Average Price |       |  |       |          
| |      |                                         | Shares    |  |  | Shares     |   | Per Share     |       |  | Total |          
| |      |                                         |           |  |  |            |   |               |       |  |       |          
| | 1995 | Consulting fee                          | -         |  |  | 50,000     |   | $             | 0.03  |  | $     | 1500     
| | 1998 | Management fee                          | -         |  |  | 7,000,000  |   | $             | 0.001 |  |       | 7,000    
| | 1998 | Consulting fee                          | -         |  |  | 620,000    |   | $             | 0.01  |  |       | 6,200    
| | 2000 | Finders fee                             | -         |  |  | 50,000     |   | $             | 0.001 |  |       | 50       
| | 2001 | Consulting fee                          | -         |  |  | 708,406    |   | $             | 2.07  |  |       | 1,468,254
| | 2002 | Deferred investment cost                | -         |  |  | 1,300,000  |   | $             | 0.05  |  |       | 65,000   
| | 2002 | Consulting fee                          | -         |  |  | 684,143    |   | $             | 0.19  |  |       | 131,400  
| | 2002 | Debt settlement                         | -         |  |  | 680,886    |   | $             | 0.20  |  |       | 138,006  
| | 2003 | Consulting fee                          | -         |  |  | 1,450,000  |   | $             | 0.14  |  |       | 203,000  
| | 2003 | Termination fee                         | 198,000   |  |  | -          |   | $             | 4.00  |  |       | 792,000  
| | 2004 | Loan conversion                         | -         |  |  | 825,364    |   | $             | 0.06  |  |       | 48,537   
| | 2004 | Loan settlement                         | -         |  |  | 613,000    |   | $             | 0.07  |  |       | 45,000   
| | 2004 | Consulting fee                          | -         |  |  | 360,000    |   | $             | 0.40  |  |       | 142,500  
| | 2004 | Deferred investment cost (cancellation) | -         |  |  | (1,300,000 | ) | $             | 0.05  |  |       | (65,000  
| | 2005 | Communications                          | -         |  |  | 56,000     |   | $             | 0.50  |  |       | 28,000   
| | 2005 | Consulting fees                         | -         |  |  | 335,000    |   | $             | 0.40  |  |       | 133,700  
| | 2005 | Legal fees                              | -         |  |  | 50,000     |   | $             | 0.50  |  |       | 25,000   
| | 2005 | Loan conversion                         | -         |  |  | 635,901    |   | $             | 0.39  |  |       | 250,160  
| |      |                                         |           |  |  |            |   |               |       |  |       |          
| |      |                                         | 198,000   |  |  | 14,118,700 |   |               |       |  | $     | 3,420,307

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

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|2. | Plan of Operation
      The Company is in the development stage, accordingly
        certain matters discussed herein are based on potential future circumstances
        and developments, which the Company anticipates, but which cannot be assured.
        The Company is currently devoting its efforts to developing The Dream
        Island Resort project in Manama, Bahrain. The Dream Island Resort project
        will be an integrated resort, entertainment, hotel and real estate facility
        to be built on a 41 acre man-made island off the north eastern coast of
        Manama, Bahrain.
      The Company was incorporated in Colorado on February
        28, 1989 as Jefferson Capital Corporation. Effective June 13, 1990 the
        Company changed its name to Ohio & Southwestern Energy Company. Effective
        July 1, 2001, the Company and Strategic Internet Investments, Incorporated
        (Strategic), an inactive Delaware corporation incorporated
        on March 2, 2001, were merged. All common shares outstanding of the Company
        were converted into an equal number of common shares of Strategic. The
        purpose of this merger was to change the corporate jurisdiction of the
        Company from Colorado to Delaware and to change the name of the Company.
        The surviving corporation of the merger is Strategic, a Delaware corporation.
      The Company has an agreement to purchase 80% of the
        outstanding shares of Gulf Star World Development W.L.L. (Gulf Star),
        a Bahrain corporation, from Star Leisure & Entertainment Inc. (Star
        Leisure). Star Leisure is controlled by a director of the Company
        and is based in British Columbia, Canada. Gulf Star is the 100% owner
        and developer of the Dream Island Resort project.
      To acquire 80% of Gulf Star, the Company must issue
        five million common shares at a price of $0.125 per share. The shares
        are to be issued over a three year period based on construction progress.
        In addition, the Company shall make cash payments to Star Leisure totaling
        $100,000 to cover a portion of hard costs accumulated by Star Leisure
        in progressing the Dream Island Project. In 2003 the Company had paid
        $34,210, with the balance of $65,790 to be paid by August 31,
        2006.
      The financial statements have been prepared on a going
        concern basis. The Company has accumulated a deficit of $7,707,845
        since inception and at June 30, 2005 has a working capital deficiency
        of $204,086. Its ability to continue as a going concern is dependent
        upon the ability of the Company to generate profitable operations in the
        future and/or to obtain the necessary financing to meet its obligations
        and repay its liabilities arising from normal business operations when
        they come due. The outcome of these matters cannot be predicted with any
        certainty at this time. The Company has historically satisfied its capital
        needs primarily by issuing equity securities. Management plans to continue
        to provide for its capital needs during the next twelve months by issuing
        equity securities, private placements, loans, and debentures convertible
        into equity. Additional operating capital could be obtained through the
        potential exercise of management and director stock options and/or exercise
        of outstanding stock purchase warrants. The Company remains at the development
        stage, as there were no revenues during the past fiscal year.
      The Dream Island project in Bahrain, the Company's principal
        business, will require, over the next twenty to twenty-four months, a
        significant amount of investment capital to be secured to ensure that
        all stages of development can proceed and be completed on schedule and
        on budget. The highest percentage of the funding requirements will be
        met through senior debt instruments with banking, investment and construction
        institutions and through government financing incentives and concessions.
        Further financing will be achieved through the pre-selling of the real
        estate units, villas and apartments, to be constructed as part of the
        Dream Island complex.
      The first stage of the project, dredging and reclamation
        of the 41 acre man-made island site, has been paid by the issuance to
        Robodh Contracting Establishment, Manama, Bahrain, of 1,268,750 Class
        A Convertible Preferred Shares in the capital of the Company at a deemed
        price of $4.00 per share. The total value of the Dredging and Reclamation
        Works contract is $5,075,000.
      In August 2004, construction commenced on the Dream
        Island Project. This initial phase of work consists of the construction
        of a temporary causeway to provide access from the coast to the offshore
        site of the future island location. Large haulage trucks have begun transporting
        and dumping quarry
|-- | 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|   | stone to create the temporary causeway from which access
        will be gained to the island site. Once the temporary causeway has been
        completed, work will commence on the creation of the Dream Island perimeter
        of the future offshore island. Thereafter, reclamation dredging operations
        will commence to move sand into the perimeter thereby creating the Dream
        Island site.
      Management believes that the close connections and contacts
        it has made in the Middle East, especially the efforts of its Chairman,
        Mr. Abbas Salih, who has been stationed predominately in Saudi Arabia
        and Bahrain for the past year to oversee the project, will be of immense
        value in completing other essential contracts during the course of this
        project.
      In December 2004, the Company signed a Letter Of Intent
        (the "LOI") with G7 Limited, a Doha, Qatar registered corporation. G7
        is an affiliated party to the Company. The LOI outlines the general terms
        and conditions which will govern a more definitive agreement to be entered
        into between the Company and G7, relating to the engagement of the Company
        as a financial partner in certain motion picture production ventures to
        be carried on by G7. Under the LOI, G7 has appointed the Company as the
        exclusive agent of G7 for the purposes of facilitating financing to meet
        that portion of G7's film production budgets that is not met through non-equity
        financing such as presales, subsidies or other similar non-debt financial
        programs.
      It is the intent of the parties that the Company will,
        subject to such transactions being qualified or eligible under applicable
        securities laws, receive financing funds as a private placement investment
        in the Company and to issue common shares of the Company in respect therefore,
        at a price per share to be agreed to by the Company and the participating
        investors. The Company will, in turn, advance the required films
        equity funding to G7.
      All funds advanced by the Company to G7 will be advanced
        to purchase a participating equity interest in certain film(s). The amount
        of participating interest in each film to be purchased by the Company
        will be negotiated on a case-by-case basis. In addition, the Company will
        also be entitled to receive options (also to be negotiated on a case-by-case
        basis) entitling the Company to purchase a greater participating interest
        in a film, up to an aggregate of fifty percent, with such option being
        exercisable by the Company through the issuance of common shares of the
        Company or as negotiated by the parties by the payment of cash, or some
        combination of cash and common shares of the Company.
      The Company's plan during the next quarter and for the
        balance of 2005 is to maintain the size and staffing of its Vancouver,
        British Columbia head office at the current levels. There are no plans
        to hire additional employees as administrative requirements at head office
        are now being adequately met by the efforts of the board members the full-time
        and temporary staff and consultants. Field operations and construction
        activities in Bahrain will be conducted through contracting and sub-contracting
        of work.
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|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 Annual Report. There were no significant
        changes in the Company's internal control or in the other factors that
        could significantly affect the Company's internal controls subsequent
        to the date of their most recent evaluation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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PART II  OTHER INFORMATION

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

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| | On August 10, 2003 the Company entered into a Convertible
        Loan Facility Agreement with Star Leisure & Entertainment Inc. (Star
        Leisure), a company controlled by a Director and Officer of SIII,
        whereby the Company would, from time to time, borrow operating funds from
        Star Leisure, at an interest rate of ten percent (10%), repayable two
        years from the date the funds are advanced (the maturity date).
        The lender has the right to convert all or part of the principal sum and
        interest into units, each unit consisting of one common share of the Company
        and one non-transferable share purchase warrant, expiring on the maturity
        date, exercisable at the applicable conversion rate which is calculated
        at a discount to the average closing market price for ten days preceding
        a loan advance. At June 30, 2005, Star Leisure had advanced a total of
        $103,206, plus accrued interest of $18,869, which can be converted
        into 706,433 units, at various a conversion prices of $0.11 to $0.20
        per unit, post stock dividend. The principal sum and any accrued interest
        under the Convertible Loan Facility are repayable on various dates ranging
        from August 13, 2005 to January 31, 2006. Star Leisure has not converted
        any part of the principal sums advanced or accrued interest into units
        as of June 30, 2005. This transaction is with an offshore non-U.S. person;
        accordingly, these securities are exempt from registration pursuant to
        Regulation S.
      On November 30, 2003, the Company issued 198,000 Class
        A Convertible Preferred Shares(1)at a deemed value of $4.00
        per share to settle a termination fee of $792,000. This termination
        fee is to a former contractor who was to perform planning services for
        the Company that were subsequently assigned to another contractor. This
        transaction is with an offshore non-U.S. person; accordingly, these securities
        are exempt from registration pursuant to Regulation S.
      In August 2004, the Company issued 10,000 common shares
        at a deemed price of $2.00 per share, for a total deemed consideration
        of $20,000, pursuant to a Consulting Services Agreement for financial
        consulting. This transaction is with an offshore non-U.S. person; accordingly,
        these securities are exempt from registration pursuant to Regulation S,
        however they are restricted under Rule 144.
      The Company also issued 300,000 common shares in August
        2004, at a deemed price of $0.38 per share, for a total deemed consideration
        of $112,500, pursuant a Promotional and Capital Funding Agreement
        for financial and investor relation services. These shares are held in
        escrow and are to be released subject to the Company obtaining certain
        future financial goals. This transaction is with an offshore non-U.S.
        person; accordingly, these securities are exempt from registration pursuant
        to Regulation S, however they are restricted under Rule 144. In June 2005,
        this agreement was terminated, and the escrowed 300,000 common shares,
        and escrowed 60,000 common dividend shares were returned for cancellation.
      The Company issued an additional 563,000 common shares
        in August 2004, as a $30,000 partial settlement of a loan from Canarab
        Acquisitions Inc. (Canarab), a company controlled by a director. In 2001,
        Canarab secured a loan on behalf of the Company, and the lender received
        as fees and collateral 563,000 shares of the Company that were owned by
        Canarab. The lender subsequently applied the collateral shares as payment
        of the outstanding loan. Accordingly, the Company issued 563,000 common
        shares to Canarab as reimbursement for those shares forfeited to the lender.
        This transaction is with an offshore non-U.S. person; accordingly, these
        securities are exempt from registration pursuant to Regulation S, however
        they are restricted under Rule 144.
      In August 2004 work commenced on the Dream Island Project,
        however there has not yet been sufficient progress to warrant a release
        of any of the escrowed shares. In January 2005, the Company issued 141,000
        common shares at a deemed price of $.50 per share, for a total deemed
        consideration of $70,500, pursuant to various consulting agreements
        for legal, computer, and financial services. These transactions are with
        offshore non-U.S. persons; accordingly, these securities are exempt from
        registration pursuant to Regulation S.
      In November 2004, the Company issued 350,000 common
        shares at a deemed price of $0.35 per share, for a total deemed consideration
        of $122,500, pursuant a Promotional and Capital Funding Agreement
        for financial and investor relation services. This transaction is with
        an offshore non-U.S. person; accordingly, these securities are exempt
        from registration pursuant to Regulation S, however they are restricted
        under Rule 144.
| | 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| | The Company issued 50,000 common shares in January
        2005, at a deemed price of $0.84 per share, for a total deemed consideration
        of $42,000, pursuant a Promotional and Capital Funding Agreement for
        financial and investor relation services. This transaction is with an
        offshore non-U.S. person; accordingly, these securities are exempt from
        registration pursuant to Regulation S, however they are restricted under
        Rule 144.
      The Company also issued 400,000 common shares in January
        2005, at a deemed price of $0.25 per share, for a total deemed consideration
        of $100,000, pursuant a Promotional and Capital Funding Agreement
        for financial and investor relation services. Of these shares, 250,000
        are held in escrow and are to be released subject to the Company obtaining
        certain future financial goals. This transaction is with an offshore non-U.S.
        person; accordingly, these securities are exempt from registration pursuant
        to Regulation S, however they are restricted under Rule 144.
      In March 2005 the Company entered into a Promotional
        and Capital Funding Agreement for financial and investor relation services.
        Pursuant to this agreement, the Company issued 100,000 common shares in
        May 2005, at a deemed price of $0.36 per share, for a total deemed
        consideration of $36,000. This transaction is with an offshore non-U.S.
        person; accordingly, these securities are exempt from registration pursuant
        to Regulation S, however they are restricted under Rule 144.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|3. | Defaults Upon Senior Securities                            
|-- | -----------------------------------------------------------
|   |                                                            
|   | -                                                          
|4. | Submission of Matters to a Vote of Security
        Holders
|   |                                                            
|   | -                                                          
|5. | Other Information                                          
|   |                                                            
|   | -                                                          
|6. | Exhibits                                                   

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

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

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SIGNATURES

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

|      |                 |  | Strategic Internet Investments, Incorporated
|----- | --------------- |  | --------------------------------------------
|      |                 |  |                                             
|Date: | August 22, 2005 |  | /s/ Ralph Shearing                          
|      |                 |  | Ralph Shearing, CEO, Director               
|      |                 |  |                                             
|Date: | August 22, 2005 |  | /s/ Abbas Salih                             
|      |                 |  | Abbas Salih, CFO, Director                  

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