---

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

FORM 10-QSB

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

For the Quarterly Period ended September 30,
2005

STRATEGIC INTERNET INVESTMENTS,
INCORPORATEDSmall Business Issuer

|Delaware               | 84-1116458                 
|---------------------- | ---------------------------
|State of incorporation | IRS Employer Identification

Suite 250, 1090 West Georgia Street Vancouver,
BCCanada V6E 3V7Address of principal executive
offices

604-684-8662Issuers telephone number

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 x No  ̈

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 October 31, 2005: 24,860,326

Transitional Small Business Disclosure Format. Yes  ̈
  No x

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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.

2

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1. Financial Statements



STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2005

(Stated in U.S. Dollars)

(Unaudited)



3

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

|                                                            |   | September 30, |   |   | December 31, |  
|----------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                            |   | 2005          |   |   | 2004         |  
|ASSETS                                                      |   |               |   |   |              |  
|                                                            |   |               |   |   |              |  
|Current                                                     |   |               |   |   |              |  
|Cash                                                        | $ | 764           |   | $ | 22,987       |  
|Prepaid expenses                                            |   | 45,710        |   |   | 64,030       |  
|                                                            |   |               |   |   |              |  
|                                                            |   | 46,474        |   |   | 87,017       |  
|                                                            |   |               |   |   |              |  
|Equipment                                                   |   | 1,772         |   |   | 2,286        |  
|Deferred
      investment costs  Note 3                    |   | 34,210        |   |   | 34,210       |  
|                                                            |   |               |   |   |              |  
|                                                            | $ | 82,456        |   | $ | 123,513      |  
|                                                            |   |               |   |   |              |  
|LIABILITIES                                                 |   |               |   |   |              |  
|                                                            |   |               |   |   |              |  
|Current                                                     |   |               |   |   |              |  
|Accounts payable                                            | $ | 106,341       |   | $ | 110,836      |  
|Due to related parties                                      |   | 45,877        |   |   | 28,752       |  
|Current portion of loans payable 
      Note 4             |   | 178,648       |   |   | 183,698      |  
|                                                            |   |               |   |   |              |  
|                                                            |   | 330,866       |   |   | 323,286      |  
|Loans payable 
      Note 4                                |   | -             |   |   | 236,137      |  
|                                                            |   |               |   |   |              |  
|                                                            |   | 330,866       |   |   | 559,423      |  
|                                                            |   |               |   |   |              |  
|STOCKHOLDERS DEFICIENCY                                    |   |               |   |   |              |  
|                                                            |   |               |   |   |              |  
|Capital Stock  Notes 4 and 5                               |   |               |   |   |              |  
|Class A Convertible
      Preferred stock, $0.001 par value |   |               |   |   |              |  
|10,000,000
      authorized, 198,000 outstanding            |   | 198           |   |   | 198          |  
|Class B Preferred
      stock, $0.001 par value             |   |               |   |   |              |  
|10,000,000
      authorized, none outstanding               |   |               |   |   |              |  
|Common stock, $0.001
      par value                        |   |               |   |   |              |  
|100,000,000
      authorized                                |   |               |   |   |              |  
|24,860,326 outstanding (2004: 18,972,675 outstanding)       |   | 24,859        |   |   | 18,971       |  
|Additional paid-in capital                                  |   | 7,521,156     |   |   | 4,348,913    |  
|Deficit accumulated during the development stage            |   | (7,794,623    | ) |   | (4,803,992   | )
|                                                            |   |               |   |   |              |  
|                                                            |   | (248,410      | ) |   | (435,910     | )
|                                                            |   |               |   |   |              |  
|                                                            | $ | 82,456        |   | $ | 123,513      |  

SEE ACCOMPANYING NOTES

4

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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 |   |   | Nine months ended |   |               | of Inception) to |  
|                                      |   | September 30,      |   |   | September 30,     |   | September 30, |                 
|                                      |   | 2005               |   |   | 2004              |   |               | 2005             |   |   | 2004       |   |   | 2005           |  
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|General and Administrative Expenses   |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Accounting and audit fees             | $ | 10,423             |   | $ | 7,357             |   | $             | 42,664           |   | $ | 29,035     |   | $ | 158,784        |  
|Amortization                          |   | 171                |   |   | 220               |   |               | 514              |   |   | 512        |   |   | 3,325          |  
|Automobile                            |   | -                  |   |   | -                 |   |               | -                |   |   | 565        |   |   | 565            |  
|Business promotion                    |   | -                  |   |   | 213               |   |               | -                |   |   | 213        |   |   | 213            |  
|Communications                        |   | 7,298              |   |   | 4,459             |   |               | 21,947           |   |   | 10,698     |   |   | 78,450         |  
|Consulting fees                       |   | 27,313             |   |   | 67,250            |   |               | 140,438          |   |   | 76,805     |   |   | 2,191,227      |  
|Interest                              |   | 3,736              |   |   | 16,149            |   |               | 17,084           |   |   | 26,073     |   |   | 68,218         |  
|Investor relations                    |   | 285                |   |   | 5,972             |   |               | 12,402           |   |   | 20,554     |   |   | 89,254         |  
|Legal fees                            |   | 354                |   |   | 5,734             |   |               | 20,754           |   |   | 7,479      |   |   | 135,167        |  
|Management fees                       |   | -                  |   |   | -                 |   |               | -                |   |   | -          |   |   | 112,932        |  
|Office and general                    |   | 2,081              |   |   | 3,981             |   |               | 3,867            |   |   | 9,365      |   |   | 135,995        |  
|Regulatory fees                       |   | 494                |   |   | 460               |   |               | 1,787            |   |   | 1,181      |   |   | 18,074         |  
|Rent                                  |   | 4,980              |   |   | 4,560             |   |               | 14,695           |   |   | 13,613     |   |   | 69,462         |  
|Transfer agent fees                   |   | 877                |   |   | 1,201             |   |               | 4,272            |   |   | 4,585      |   |   | 37,411         |  
|Travel                                |   | 17,992             |   |   | 26,688            |   |               | 40,441           |   |   | 89,191     |   |   | 140,159        |  
|Non-cash compensation charge          |   | 6,300              |   |   | 60,550            |   |               | 25,700           |   |   | 127,650    |   |   | 455,735        |  
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Loss before the following:            |   | (82,304            | ) |   | (204,794          | ) |               | (346,565         | ) |   | (417,519   | ) |   | (3,694,971     | )
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Unauthorized
      distribution       |   | -                  |   |   | -                 |   |               | -                |   |   | -          |   |   | (69,116        | )
|Termination fee                       |   | -                  |   |   | -                 |   |               | -                |   |   | -          |   |   | (792,000       | )
|Gain (loss) on foreign
      exchange |   | (4,474             | ) |   | (428              | ) |               | (4,648           | ) |   | (428       | ) |   | (8,245         | )
|Gain on settlement of debt            |   | -                  |   |   | -                 |   |               | -                |   |   | -          |   |   | 15,464         |  
|Write-down of advances
      to       |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|related party                         |   | -                  |   |   | -                 |   |               | -                |   |   | -          |   |   | (606,337       | )
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Net loss for the
      period         | $ | (86,778            | ) | $ | (205,222          | ) | $             | (351,213         | ) | $ | (417,947   | ) | $ | (5,155,205     | )
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Basic loss per
      share            | $ | (0.00              | ) | $ | (0.01             | ) | $             | (0.01            | ) | $ | (0.02      | ) |   |                |  
|                                      |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|Weighted average number of common     |   |                    |   |   |                   |   |               |                  |   |   |            |   |   |                |  
|shares outstanding                    |   | 24,860,326         |   |   | 18,913,525        |   |               | 23,613,756       |   |   | 18,167,966 |   |   |                |  

SEE ACCOMPANYING NOTES

5

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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   |  
|                                                    |   | Nine months ended |   |   | Inception) to |  
|                                                    |   | September 30,     |   |   | September 30, |  
|                                                    |   | 2005              |   |   | 2004          |   |   | 2005            |  
|Operating Activities                                | $ | (351,213          | ) | $ | (417,947      | ) | $ | (5,155,205      | )
|Net loss for the period                             |   |                   |   |   |               |   |   |                 |  
|Adjustments to
      reconcile net loss to net      |   |                   |   |   |               |   |   |                 |  
|cash used
      in operations:                      |   |                   |   |   |               |   |   |                 |  
|Amortization                                        |   | 514               |   |   | 512           |   |   | 3,325           |  
|Communications                                      |   | 12,000            |   |   | -             |   |   | 12,000          |  
|Consulting fees                                     |   | 140,438           |   |   | 20,000        |   |   | 2,071,242       |  
|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                        |   | 25,700            |   |   | 127,650       |   |   | 455,735         |  
|Termination fees                                    |   | -                 |   |   | -             |   |   | 792,000         |  
|Changes in non-cash items:                          |   |                   |   |   |               |   |   |                 |  
|Prepaid expenses                                    |   | 2,780             |   |   | (2,280        | ) |   | -               |  
|Accounts payable                                    |   | 36,690            |   |   | (48,604       | ) |   | 259,811         |  
|Due to/from related parties, net                    |   | 17,125            |   |   | 679           |   |   | 45,877          |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|Net cash used in operating activities               |   | (107,349          | ) |   | (319,990      | ) |   | (906,740        | )
|                                                    |   |                   |   |   |               |   |   |                 |  
|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                |   | 8,973             |   |   | 238,875       |   |   | 522,345         |  
|Proceeds from issuance
      of common stock        |   | 76,153            |   |   | 83,250        |   |   | 1,032,631       |  
|Payment of offering costs                           |   | -                 |   |   | -             |   |   | (27,270         | )
|Contributed capital                                 |   | -                 |   |   | -             |   |   | 25,442          |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|Net cash provided by financing activities           |   | 85,126            |   |   | 322,125       |   |   | 1,553,148       |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|Increase (decrease) in cash
      during the period |   | (22,223           | ) |   | 66            |   |   | 764             |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|Cash, beginning of the period                       |   | 22,987            |   |   | 346           |   |   | -               |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|Cash, end of the period                             | $ | 764               |   | $ | 412           |   | $ | 764             |  
|                                                    |   |                   |   |   |               |   |   |                 |  
|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

6

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

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

Contd

SEE ACCOMPANYING NOTES

7

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

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

Contd

SEE ACCOMPANYING NOTES

8

---

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

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

Contd

SEE ACCOMPANYING NOTES

9

---

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

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

Contd

SEE ACCOMPANYING NOTES

10

---

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

|                                                                          |  |                 |  |   |              |  |  |            |  |   |             |  |   |            |  |   | Deficit     |   |   |          |  
|------------------------------------------------------------------------- |  | --------------- |  | - | ------------ |  |  | ---------- |  | - | ----------- |  | - | ---------- |  | - | ----------- | - | - | -------- | -
|                                                                          |  |                 |  |   |              |  |  |            |  |   |             |  |   |            |  |   | Accumulated |   |   |          |  
|                                                                          |  |                 |  |   |              |  |  |            |  |   |             |  |   | Additional |  |   | During the  |   |   |          |  
|                                                                          |  | Preferred Stock |  |   | Common Stock |  |  | Paid-In    |  |   | Development |  |   |            | 
|                                                                          |  | Shares          |  |   | Par Value    |  |  | Shares     |  |   | Par Value   |  |   | Capital    |  |   | Stage       |   |   | Total    |  
|                                                                          |  |                 |  |   |              |  |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, December 31, 2004                                                |  | 198,000         |  | $ | 198          |  |  | 18,972,675 |  | $ | 18,971      |  | $ | 4,348,913  |  | $ | (4,803,992  | ) | $ | (435,910 | )
|Non-cash compensation
      charge                                        |  | -               |  |   | -            |  |  | -          |  |   | -           |  |   | 25,700     |  |   | -           |   |   | 25,700   |  
|Issue of stock for cash pursuant to the exercise                          |  |                 |  |   |              |  |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|of share
      purchase
      warrants                  
       at $0.07 |  | -               |  |   | -            |  |  | 75,820     |  |   | 76          |  |   | 5,232      |  |   | -           |   |   | 5,308    |  
| at $0.10                                                                |  | -               |  |   | -            |  |  | 357,760    |  |   | 357         |  |   | 35,418     |  |   | -           |   |   | 35,775   |  
| at $0.11                                                                |  | -               |  |   | -            |  |  | 299,724    |  |   | 300         |  |   | 31,270     |  |   | -           |   |   | 31,570   |  
| at $0.21                                                                |  | -               |  |   | -            |  |  | 16,803     |  |   | 17          |  |   | 3,483      |  |   | -           |   |   | 3,500    |  
|Issue of stock for debt                          
        at $0.39       |  | -               |  |   | -            |  |  | 635,901    |  |   | 636         |  |   | 249,524    |  |   | -           |   |   | 250,160  |  
|Issuance of stock for
      services                  
       at $0.25   |  | -               |  |   | -            |  |  | 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                                                                  |  | -               |  |   | -            |  |  | -          |  |   | -           |  |   | -          |  |   | (351,213    | ) |   | (351,213 | )
|                                                                          |  |                 |  |   |              |  |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, September 30, 2005                                               |  | 198,000         |  | $ | 198          |  |  | 24,860,326 |  | $ | 24,859      |  | $ | 7,521,156  |  | $ | (7,794,623  | ) | $ | (248,410 | )

SEE ACCOMPANYING NOTES

11

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A
Development Stage Company)NOTES TO THE INTERIM CONSOLIDATED FINANCIAL
STATEMENTS September 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 nine months ended
      September 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 September 30, 2005, the Company has a working capital
      deficiency of $284,392, 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
      $7,794,623 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. Realization values may be substantially different from carrying
      values as shown in these financial statements should the Company be unable
      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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

12

---

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

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

| |    |                                                                             |   | September 30, |   |   | December 31, |  
| | -- | --------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
| |    |                                                                             |   | 2005          |   |   | 2004         |  
| |    |                                                                             |   |               |   |   |              |  
| | a) | Loan payable to a company controlled by a
      director of the Company     |   |               |   |   |              |  
| |    | including accrued interest of $406(2004:
      $9,198) The loan is          |   |               |   |   |              |  
| |    | unsecured, bearing interest at 12% per annum
      and is repayable on      |   |               |   |   |              |  
| |    | demand.                                                                     | $ | 7,208         |   | $ | 29,198       |  
| |    |                                                                             |   |               |   |   |              |  
| | b) | Loan payable to a shareholder including accrued
      interest of $3,190    |   |               |   |   |              |  
| |    | (2004: $2,658). The loan is unsecured, bears
      interest at 8% per       |   |               |   |   |              |  
| |    | annum and is repayable upon demand.                                         |   | 9,225         |   |   | 8,693        |  
| |    |                                                                             |   |               |   |   |              |  
| | c) | Loans payable to companies controlled by
      directors of the Company.    |   |               |   |   |              |  
| |    | The loans are unsecured, non-interest bearing,
      repayable upon         |   |               |   |   |              |  
| |    | demand, in Canadian funds in the amount of
      Cdn$32,244.                |   | 27,730        |   |   | -            |  
| |    |                                                                             |   |               |   |   |              |  
| | d) | Loan payable to a company controlled by a
      director of the Company     |   |               |   |   |              |  
| |    | including accrued interest of $544(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$10,853.                                                |   | 9,333         |   |   | 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
      $21,946(2004: $13,033),        |   |               |   |   |              |  
| |    | pursuant to Convertible Loan Agreements.
      Interest is calculated at    |   |               |   |   |              |  
| |    | 10% per annum. $42,000 of the loans are due on
      demand and             |   |               |   |   |              |  
| |    | 61,206 of the loans mature on various dates to
      January 31, 2006.      |   |               |   |   |              |  
| |    | The lender may at anytime convert $61,206 of
      the principal sum plus   |   |               |   |   |              |  
| |    | all of the 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 $0.17 to $0.20 per share.       |   | 125,152       |   |   | 116,239      |  
| |    |                                                                             |   |               |   |   |              |  
| |    |                                                                             |   | 178,648       |   |   | 419,835      |  
| |    | Less:
      current portion                                                 |   | (178,648      | ) |   | (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.

13

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  September 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 September 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 September 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 September 30, 2005, of the total
outstanding share purchase options, 2,010,000 (December 31, 2004: 2,029,200)
were exercisable.

14

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  September 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 nine months ended September 30,
      2005 is as follows:

Cumulative fromFebruary 28,1989 (Date ofThree months ended
    
    
    Nine months ended
    
    
    Inception) toSeptember 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005Total non-cash compensationcharge vested
    $
    6,300
    
    $
    124,850
    
    $
    31,300
    
    $
    317,750
    
    $
    955,657Employees non-cashcompensation charge
    
    -
    
    
    (64,300
    )
    
    (5,600
    )
    
    (190,100
    )
    
    (499,922
    )Consultants non-cash compensationcharge recognized
    $
    6,300
    
    $
    60,550
    
    $
    25,700
    
    $
    127,650
    
    $
    455,735


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

| |                      |             |                    |                   |                  |                | Cumulative    
| | -------------------- | ----------- | ------------------ | ----------------- | ---------------- | -------------- | --------------
| |                      |             |                    |                   |                  |                | from February 
| |                      |             |                    |                   |                  |                | 28, 1989 (Date
| |                      |             | Three months ended | Nine months ended | of Inception) to
| |                      |             | September 30,      | September 30,     | September 30,   
| |                      |             | 2005               | 2004              | 2005             | 2004           | 2005          
| |                      |             |                    |                   |                  |                |               
| | Net loss             | As reported | $ (86,778)         | $ (205,222)       | $ (351,213)      | $ (417,947)    | $ (5,155,205) 
| |                      |             |                    |                   |                  |                |               
| |                      | Pro-forma   | $ (86,778)         | $ (269,522)       | $ (356,813)      | $ (608,047)    | $ (5,655,127) 
| |                      |             |                    |                   |                  |                |               
| | Basic loss per share | As reported | $ (0.00)           | $ (0.01)          | $
      (0.01)   | $ (0.02)       | -             
| |                      | Pro-forma   | $ (0.00)           | $
      (0.01)    | $ (0.02)         | $
      (0.03) | -             

15

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  September 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 September 30, 2005, the following
share purchase warrants were outstanding:

Number of Warrants
    Exercise Price
    Expiry Date9,592
    $0.21
    February 1, 2006114,428
    $0.23
    March 1, 200643,500
    $0.25
    April 1, 200610,126
    $0.50
    May 1, 200655,264
    $0.63
    May 1, 200622,500
    $0.67
    June 1, 2006131,507
    $0.61
    July 1, 20068,824
    $0.57
    July 1, 200626,939
    $0.41
    September 1, 200621,510
    $0.44
    October 1, 200696,047
    $0.24
    January 31, 2007540,237


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.

16

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  September 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 September 30, 2005, no value had been recorded for the
      shares as there has not yet been sufficient progress 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.

17

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company)
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  September 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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.

18

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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 outstanding common shares of the Company were
      converted into an equal number of common shares of Strategic. The purpose
      of this merger was to change the corporate jurisdiction of the Company
      from Colorado to Delaware and to change the name of the Company. The
      surviving corporation of the merger is Strategic, a Delaware
      corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company has an agreement to purchase 80% of the
      outstanding shares of Gulf Star World Development W.L.L. (Gulf Star), a
      Bahrain corporation, from Star Leisure & Entertainment Inc. (Star
      Leisure). Star Leisure is controlled by a director of the Company and is
      based in British Columbia, Canada. Gulf Star is the 100% owner and
      developer of the Dream Island Resort project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | To acquire 80% of Gulf Star, the Company must issue five
      million common shares at a price of $0.125 per share. The shares are to be
      issued over a three year period based on construction progress. In
      addition, the Company shall make cash payments to Star Leisure totaling
      $100,000 to cover a portion of hard costs accumulated by Star Leisure in
      progressing the Dream Island Project. In 2003 the Company had paid
      $34,210, with the balance of $65,790 to be paid by August 31, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The financial statements have been prepared on a going
      concern basis. The Company has accumulated a deficit of $7,794,623 since
      inception and at September 30, 2005 has a working capital deficiency of
      $284,392. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

19

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|   | In August 2004, construction commenced on the Dream
      Island Project. This initial phase of work consists of the construction of
      a temporary causeway to provide access from the coast to the offshore site
      of the future island location. Large haulage trucks have begun
      transporting and dumping quarry stone to create the temporary causeway
      from which access will be gained to the island site. Once the temporary
      causeway has been completed, work will commence on the creation of the
      Dream Island perimeter of the future offshore island. Thereafter,
      reclamation dredging operations will commence to move sand into the
      perimeter thereby creating the Dream Island site.                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Management believes that the close connections and
      contacts it has made in the Middle East, especially the efforts of its
      Chairman, Mr. Abbas Salih, who has been stationed predominately in Saudi
      Arabia and Bahrain for the past year to oversee the project, will be of
      immense value in completing other essential contracts during the course of
      this project.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In December 2004, the Company signed a Letter Of Intent
      (the "LOI") with G7 Entertainment Ltd. (G7), a British Columbia, Canada
      registered corporation. G7 is controlled by directors of the Company. The
      LOI outlines the general terms and conditions which will govern a more
      definitive agreement to be entered into between the Company and G7,
      relating to the engagement of the Company as a financial partner in
      certain motion picture production ventures to be carried on by G7. Under
      the LOI, G7 has appointed the Company as the exclusive agent of G7 for the
      purposes of facilitating financing to meet that portion of G7's film
      production budgets that is not met through non-equity financing such as
      presales, subsidies or other similar non-debt financial programs.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | It is the intent of the parties that the Company will,
      subject to such transactions being qualified or eligible under applicable
      securities laws, receive financing funds as a private placement investment
      in the Company and to issue common shares of the Company in respect
      therefore, at a price per share to be agreed to by the Company and the
      participating investors. The Company will, in turn, advance the required
      films equity funding to G7.                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | All funds advanced by the Company to G7 will be advanced
      to purchase a participating equity interest in certain film(s). The amount
      of participating interest in each film to be purchased by the Company will
      be negotiated on a case-by-case basis. In addition, the Company will also
      be entitled to receive options (also to be negotiated on a case-by-case
      basis) entitling the Company to purchase a greater participating interest
      in a film, up to an aggregate of fifty percent, with such option being
      exercisable by the Company through the issuance of common shares of the
      Company or as negotiated by the parties by the payment of cash, or some
      combination of cash and common shares of the Company.                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company's plan during the next quarter and for the
      balance of 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.                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|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.                                                                                                                                                                                                                                                                                                                                           

20

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PART II  OTHER INFORMATION

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

21

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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
Strategic, 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 September 30,
2005, Star Leisure had advanced a total of $103,206 and accrued interest of
$21,946. During the period ended September 30, 2005, $42,000 of the loans
matured, and the right to convert this principal amount into units expired.
Under the terms of the Convertible Loan Facility Agreement, any loans that
mature without being converted or repaid become due on demand. At September 30,
2005 there remained loan principal of $61,206 eligible for conversion into
338,521 units, at various conversion prices of $0.17 to $0.20 per unit, post
stock dividend. The lender retains the right to convert the total accrued
interest of $21,946 into units. The $61,206 principal sum and any accrued
interest under the Convertible Loan Facility are repayable on various dates
ranging from October 6, 2005 to January 31, 2006. Star Leisure has not converted
any part of the principal sums advanced or accrued interest into units as of
September 30, 2005. Subsequent to the period end, a further $19,206 of the loans
matured without being converted. 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.

22

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|   | In November 2004, the Company issued 350,000 common
      shares at a deemed price of $0.35 per share, for a total deemed
      consideration of $122,500, pursuant a Promotional and Capital Funding
      Agreement for financial and investor relation services. This transaction
      is with an offshore non-U.S. person; accordingly, these securities are
      exempt from registration pursuant to Regulation S, however they are
      restricted under Rule 144.                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company issued 50,000 common shares in January 2005,
      at a deemed price of $0.84 per share, for a total deemed consideration of
      $42,000, pursuant a Promotional and Capital Funding Agreement for
      financial and investor relation services. This transaction is with an
      offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144.                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company also issued 400,000 common shares in January
      2005, at a deemed price of $0.25 per share, for a total deemed
      consideration of $100,000, pursuant a Promotional and Capital Funding
      Agreement for financial and investor relation services. Of these shares,
      250,000 are held in escrow and are to be released subject to the Company
      obtaining certain future financial goals. This transaction is with an
      offshore non-U.S. person; accordingly, these securities are exempt from
      registration pursuant to Regulation S, however they are restricted under
      Rule 144.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In March 2005 the Company entered into a Promotional and
      Capital Funding Agreement for financial and investor relation services.
      Pursuant to this agreement, the Company issued 100,000 common shares in
      May 2005, at a deemed price of $0.36 per share, for a total deemed
      consideration of $36,000. This transaction is with an offshore non-U.S.
      person; accordingly, these securities are exempt from registration
      pursuant to Regulation S, however they are restricted under Rule 144.                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (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 ofExhibit Items
      Description
      Exhibit601-3(i)
      Articles of Incorporation
      Note 1601-(3)(ii)
      Bylaws
      Note 1601-(3)(iii)
      Certificate of Amendment
      Note 1601-(10)
      Stock Award Plan
      Note 2601-(31)
      Rule 13a-14(a)/15d-14(a) Certification
        - CEO
      Exhibit 31.1601-(31)
      Rule 13a-14(a)/15d-14(a)
        Certification - CFO
      Exhibit 31.2601-(32)
      Section 1350 Certification - CEO
      Exhibit 32.1601-(32)
      Section 1350 Certification
        - CFO
      Exhibit 32.2


Note 1:
    Incorporated by reference to Form 10-KSB Annual Report
      for the year ending December 31, 2001Note 2:
    Incorporated by reference to Form 10-KSB Annual Report
      for the year ending December 31, 2002 23


---

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: | November 22, 2005 |  | /s/
      Ralph Shearing                          
|      |                   |  | Ralph Shearing, CEO, Director                     
|      |                   |  |                                                   
|Date: | November 22, 2005 |  | /s/
      Abbas Salih                             
|      |                   |  | Abbas Salih, CFO, Director                        

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