---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2009

Commission File No. 033-28188

Strategic Internet Investments, Incorporated
(Registrant name)

|State of incorporation:                 | Delaware                                  
|--------------------------------------- | ------------------------------------------
|                                        |                                           
|IRS Employer Identification:            | 84-1116458                                
|                                        |                                           
|Address of principal executive offices: | Nisar Square, Benyas Centre Office No. 207
|                                        | P.O. Box 40088,                           
|                                        | Dubai, United Arab Emirates               
|                                        |                                           
|Registrants telephone number           | 009 714 223 1189                          

|Check whether the issuer (1) filed all reports
      required to be filed by Section 13or 15(d) of the Exchange Act
      during the past 12 months, and (2) has beensubject to such filing
      requirements for the past 90 days. |  | Yes        | ( X ) | No | ( )
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------- | ----- | -- | ---
|                                                                                                                                                                                                                                     |  |            |       |    |    
|Indicate by check mark whether the registrant is a
      smaller reporting company(as defined in Rule 12b-2 of the Exchange
      Act).                                                                                              |  | Yes        | ( X ) | No | ( )
|                                                                                                                                                                                                                                     |  |            |       |    |    
|Indicate by check mark whether the registrant is a
      shell company (as definedin Rule 12b-2 of the Exchange Act).                                                                                                                |  | Yes        | ( X ) | No | ( )
|                                                                                                                                                                                                                                     |  |            |       |    |    
|                                                                                                                                                                                                                                     |  |            |       |    |    
|Common shares outstanding as of March 31, 2009:                                                                                                                                                                                      |  | 27,610,326 |       |   

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PART IFINANCIAL
INFORMATION

Forward Looking Statements.

This report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts,
potential or continue or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled Risk Factors and the risks set out below, any of which may cause our
or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

These risks include, by way of example and not in limitation:

- results of initial feasibility, pre-feasibility and feasibility studies,
  and the possibility that future real estate development results will not be
  consistent with our expectations;
- real estate development risks, including risks related to accidents,
  equipment breakdowns, labour disputes or other unanticipated difficulties or
  interruptions in development construction;
- the potential for delays in development activities or the completion of
  feasibility studies;
- risks related to the inherent uncertainty of cost estimates and the
  potential for unexpected costs and expenses;
- risks related to commodity price fluctuations;
- the uncertainty of profitability based upon our history of losses;
- risks related to failure to obtain adequate financing on a timely basis
  and on acceptable terms for our planned development projects;
- risks related to environmental regulation and liability;
- risks that the amounts reserved or allocated for environmental compliance,
  reclamation, control measures, monitoring and on-going maintenance may not be
  sufficient to cover such costs;
- risks related to tax assessments;
- political and regulatory risks associated with real estate development;
  and
- other risks and uncertainties related to our prospects, properties and
  business strategy.

This list is not an exhaustive list of the factors that may
affect any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.

The Company intends that such forward-looking statements be
subject to the Safe Harbors for such statements. Forward looking statements are
made based on managements beliefs, estimates and opinions on the date the
statements are made and we undertake no obligation to update forward-looking
statements if these beliefs, estimates and opinions or other circumstances
should change. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this report, unless otherwise specified, all dollar amounts
are expressed in United States dollars and all references to common stock
refer to the common shares in our capital stock. As used in this report, the
terms we, us, our, the Company and Strategic mean Strategic Internet
Investments, Incorporated, unless otherwise indicated.

---

1. Financial Statements

STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM FINANCIAL STATEMENTS

March 31, 2009

(Stated in U.S. Dollars)

(Unaudited)

---

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

|                                                            |   | March
      31, |   |   | December 31, |  
|----------------------------------------------------------- | - | --------------- | - | - | ------------ | -
|                                                            |   | 2009            |   |   | 2008         |  
|ASSETS                                                      |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Cash                                                        | $ | 112             |   | $ | 256          |  
|Prepaid expenses  Note 4                                   |   | 4,000           |   |   | 10,000       |  
|                                                            |   | 4,112           |   |   | 10,256       |  
|Deferred
      investment costs  Notes 2 and 4             |   | 1               |   |   | 1            |  
|                                                            | $ | 4,113           |   | $ | 10,257       |  
|                                                            |   |                 |   |   |              |  
|LIABILITIES                                                 |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Accounts payable  Note
      6                             | $ | 539,035         |   | $ | 537,716      |  
|Loans payable  Note 3                                      |   | 515,527         |   |   | 492,839      |  
|TOTAL LIABILITIES                                           |   | 1,054,562       |   |   | 1,030,555    |  
|Class A Convertible Preferred stock, $0.001 par value       |   |                 |   |   |              |  
|10,000,000 authorized, 198,000
      outstanding  Note 4   |   | 792,000         |   |   | 792,000      |  
|CAPITAL DEFICIT                                             |   |                 |   |   |              |  
|Capital Stock  Notes 4, 5 and 6                            |   |                 |   |   |              |  
|Common stock, $0.001 par value                              |   |                 |   |   |              |  
|100,000,000 authorized                                      |   |                 |   |   |              |  
|27,610,326
      outstanding (2008: 27,610,326 outstanding) |   | 27,610          |   |   | 27,610       |  
|Additional paid-in capital                                  |   | 7,765,583       |   |   | 7,765,583    |  
|Deficit
      accumulated during the development stage      |   | (9,635,642      | ) |   | (9,605,491   | )
|                                                            |   | (1,842,449      | ) |   | (1,812,298   | )
|                                                            | $ | 4,113           |   | $ | 10,257       |  

Nature of Operations and Ability to Continue as a Going Concern
 Note 1 Commitments  Notes 3, 4, and 6

SEE ACCOMPANYING NOTES

---

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

|                                           |   |                              |   |   |            |   |   | Cumulative from |  
|------------------------------------------ | - | ---------------------------- | - | - | ---------- | - | - | --------------- | -
|                                           |   |                              |   |   |            |   |   | February 28,    |  
|                                           |   |                              |   |   |            |   |   | 1989 (Date of   |  
|                                           |   |                              |   |   |            |   |   | Inception) to   |  
|                                           |   | Three months ended March 31, |   |   | March 31,  |  
|                                           |   | 2009                         |   |   | 2008       |   |   | 2009            |  
|                                           |   |                              |   |   |            |   |   |                 |  
|General and Administrative Expenses        |   |                              |   |   |            |   |   |                 |  
|Accounting and audit
      fees            | $ | 14,000                       |   | $ | 5,820      |   | $ | 303,317         |  
|Amortization                               |   | -                            |   |   | -          |   |   | 3,616           |  
|Communications                             |   | 287                          |   |   | 878        |   |   | 104,890         |  
|Consulting fees  Note 5 and 6             |   | 6,000                        |   |   | 35,000     |   |   | 3,415,546       |  
|Interest  Notes 3 and
      6             |   | 11,627                       |   |   | 9,388      |   |   | 418,612         |  
|Investor relations                         |   | -                            |   |   | -          |   |   | 91,385          |  
|Legal fees                                 |   | -                            |   |   | -          |   |   | 166,684         |  
|Management fees  Note 6                   |   | -                            |   |   | 46,125     |   |   | 546,325         |  
|Office and general 
      Note 6          |   | 83                           |   |   | 87         |   |   | 142,407         |  
|Regulatory fees                            |   | 454                          |   |   | 134        |   |   | 29,008          |  
|Rent  Note 6                              |   | -                            |   |   | 6,000      |   |   | 135,615         |  
|Transfer agent fees (recovery)             |   | 440                          |   |   | (1,475     | ) |   | 43,633          |  
|Travel                                     |   | -                            |   |   | -          |   |   | 110,120         |  
|Loss on disposal of equipment              |   | -                            |   |   | -          |   |   | 1,481           |  
|Write-down of advances
      to            |   |                              |   |   |            |   |   |                 |  
|related
      party                        |   | -                            |   |   | -          |   |   | 606,337         |  
|                                           |   |                              |   |   |            |   |   |                 |  
|Operating loss                             |   | (32,891                      | ) |   | (101,957   | ) |   | (6,118,976      | )
|                                           |   |                              |   |   |            |   |   |                 |  
|Unauthorized distribution                  |   | -                            |   |   | -          |   |   | (69,116         | )
|Termination fee                            |   | -                            |   |   | -          |   |   | (792,000        | )
|Gain (loss) on foreign exchange            |   | 2,740                        |   |   | 2,672      |   |   | (7,156          | )
|Gain on settlement of
      payables       |   | -                            |   |   | -          |   |   | 25,233          |  
|Write-down of deferred investment          |   |                              |   |   |            |   |   |                 |  
|costs  Note 4                             |   | -                            |   |   | -          |   |   | (34,209         | )
|                                           |   |                              |   |   |            |   |   |                 |  
|Net loss for the period                    | $ | (30,151                      | ) | $ | (99,285    | ) | $ | (6,996,224      | )
|                                           |   |                              |   |   |            |   |   |                 |  
|Basic and diluted loss per share           | $ | (0.00                        | ) | $ | (0.00      | ) |   |                 |  
|                                           |   |                              |   |   |            |   |   |                 |  
|Weighted average common shares outstanding |   | 27,610,326                   |   |   | 26,860,326 |   |   |                 |  

SEE ACCOMPANYING NOTES

---

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

|                                                            |   |                              |   |   |           |   |   | Cumulative from        |  
|----------------------------------------------------------- | - | ---------------------------- | - | - | --------- | - | - | ---------------------- | -
|                                                            |   |                              |   |   |           |   |   | February 28, 1989      |  
|                                                            |   |                              |   |   |           |   |   | (Date of Inception) to |  
|                                                            |   | Three months ended March 31, |   |   | March 31, |  
|                                                            |   | 2009                         |   |   | 2008      |   |   | 2009                   |  
|Operating Activities                                        |   |                              |   |   |           |   |   |                        |  
|Net loss for the period                                     | $ | (30,151                      | ) | $ | (99,285   | ) | $ | (6,996,224             | )
|Adjustments to reconcile net loss to net cash
      used in |   |                              |   |   |           |   |   |                        |  
|operating activities:                                       |   |                              |   |   |           |   |   |                        |  
|Amortization                                                |   | -                            |   |   | -         |   |   | 3,616                  |  
|Beneficial conversion feature on convertible debt           |   | -                            |   |   | -         |   |   | 239,662                |  
|Communications                                              |   | -                            |   |   | -         |   |   | 28,000                 |  
|Consulting fees                                             |   | 6,000                        |   |   | 35,000    |   |   | 2,474,554              |  
|Gain on
      settlement of payables                        |   | -                            |   |   | -         |   |   | (25,233                | )
|Net interest accrued on loans                               |   | 11,627                       |   |   | 9,388     |   |   | 55,272                 |  
|Legal fees                                                  |   | -                            |   |   | -         |   |   | 25,000                 |  
|Loss on disposal of equipment                               |   | -                            |   |   | -         |   |   | 1,481                  |  
|Management
      fees                                       |   | -                            |   |   | -         |   |   | 7,000                  |  
|Stock-based compensation                                    |   | -                            |   |   | -         |   |   | 736,053                |  
|Termination
      fees                                      |   | -                            |   |   | -         |   |   | 792,000                |  
|Write-down of deferred investment costs                     |   | -                            |   |   | -         |   |   | 34,209                 |  
|Write-down
      of advances to related party               |   | -                            |   |   | -         |   |   | 606,337                |  
|Changes in non-cash item:                                   |   |                              |   |   |           |   |   |                        |  
|Accounts payable                                            |   | 1,319                        |   |   | 52,616    |   |   | 676,980                |  
|                                                            |   |                              |   |   |           |   |   |                        |  
|Net cash used in
      operating activities                 |   | (11,205                      | ) |   | (2,281    | ) |   | (1,341,293             | )
|                                                            |   |                              |   |   |           |   |   |                        |  
|Investing Activities                                        |   |                              |   |   |           |   |   |                        |  
|Organization costs                                          |   | -                            |   |   | -         |   |   | (750                   | )
|Acquisition of capital assets                               |   | -                            |   |   | -         |   |   | (4,347                 | )
|Deferred investment costs                                   |   | -                            |   |   | -         |   |   | (34,210                | )
|Advances to
      related party                             |   | -                            |   |   | -         |   |   | (606,337               | )
|                                                            |   |                              |   |   |           |   |   |                        |  
|Net cash used in
      investing activities                 |   | -                            |   |   | -         |   |   | (645,644               | )
|                                                            |   |                              |   |   |           |   |   |                        |  
|Financing Activities                                        |   |                              |   |   |           |   |   |                        |  
|Loans payable                                               |   | 11,061                       |   |   | 19,379    |   |   | 813,720                |  
|Due to related parties                                      |   | -                            |   |   | -         |   |   | 15,526                 |  
|Proceeds from issuance of common
      stock                |   | -                            |   |   | -         |   |   | 1,162,631              |  
|Payment of offering costs                                   |   | -                            |   |   | -         |   |   | (30,270                | )
|Additional paid-in capital                                  |   | -                            |   |   | -         |   |   | 25,442                 |  
|                                                            |   |                              |   |   |           |   |   |                        |  
|Net cash provided by financing activities                   |   | 11,061                       |   |   | 19,379    |   |   | 1,987,049              |  
|                                                            |   |                              |   |   |           |   |   |                        |  
|Increase (decrease) in cash during the
      period         |   | (144                         | ) |   | 17,098    |   |   | 112                    |  
|Cash, beginning of
      the period                         |   | 256                          |   |   | 65        |   |   | -                      |  
|                                                            |   |                              |   |   |           |   |   |                        |  
|Cash, end of the
      period                               | $ | 112                          |   | $ | 17,163    |   | $ | 112                    |  
|                                                            |   |                              |   |   |           |   |   |                        |  
|Supplementary disclosure of cash flows:                     |   |                              |   |   |           |   |   |                        |  
|Cash paid for Interest                                      | $ | -                            |   | $ | -         |   | $ | 93,859                 |  

Non-cash Transactions  Note 5

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM STATEMENTS OF CHANGES IN CAPITAL DEFICIT                                 
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2009
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                           |  |              |  |   |                 |  |   |             |  |   | Deficit     |   |   |         |  
|------------------------------------------ |  | ------------ |  | - | --------------- |  | - | ----------- |  | - | ----------- | - | - | ------- | -
|                                           |  |              |  |   |                 |  |   |             |  |   | Accumulated |   |   |         |  
|                                           |  |              |  |   |                 |  |   | Additional  |  |   | During the  |   |   |         |  
|                                           |  | Common Stock |  |   | Paid-In         |  |   | Development |  |   |             |  
|                                           |  | 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 | )
|                                           |  |              |  |   |                 |  |   |             |  |   |             |   |   |         |  
|Balance, December 31, 1995                 |  | 116,695      |  |   | 116             |  | $ | 108,956     |  |   | (110,500    | ) |   | (1,428  | )
|Net loss                                   |  | -            |  |   | -               |  |   | -           |  |   | (9,068      | ) |   | (9,068  | )
|                                           |  |              |  |   |                 |  |   |             |  |   |             |   |   |         |  
|Balance December 31, 1996                  |  | 116,695      |  |   | 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 | )

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM STATEMENTS OF CHANGES IN CAPITAL DEFICIT                                 
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2009
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                                    |              |  |              |  |   |                 |  |   |             |   |   | Deficit     |   |   |            |  
|--------------------------------------------------- | ------------ |  | ------------ |  | - | --------------- |  | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                                    |              |  |              |  |   |                 |  |   |             |   |   | Accumulated |   |   |            |  
|                                                    |              |  |              |  |   |                 |  |   | Additional  |   |   | During the  |   |   |            |  
|                                                    |              |  | Common Stock |  |   | Paid-In         |  |   | Development |   |   |             |  
|                                                    |              |  | Shares       |  |   | Par
      Value |  |   | Capital     |   |   | Stage       |   |   | Total      |  
|                                                    |              |  |              |  |   |                 |  |   |             |   |   |             |   |   |            |  
|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     |  
|                                                    |              |  |              |  |   |                 |  |   |             |   |   |             |   |   |            |  
|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   | )
|                                                    |              |  |              |  |   |                 |  |   |             |   |   |             |   |   |            |  
|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   |  | 650,000      |  |   | 650             |  |   | 64,350      |   |   | -           |   |   | 65,000     |  
|Net loss                                            |              |  | -            |  |   | -               |  |   | -           |   |   | (1,208,941  | ) |   | (1,208,941 | )

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM STATEMENTS OF CHANGES IN CAPITAL DEFICIT                                 
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2009
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                                    |            |  |              |   |   |                 |   |   |             |   |   | Deficit     |   |   |            |  
|--------------------------------------------------- | ---------- |  | ------------ | - | - | --------------- | - | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                                    |            |  |              |   |   |                 |   |   |             |   |   | Accumulated |   |   |            |  
|                                                    |            |  |              |   |   |                 |   |   | Additional  |   |   | During the  |   |   |            |  
|                                                    |            |  | Common Stock |   |   | Paid-In         |   |   | Development |   |   |             |  
|                                                    |            |  | Shares       |   |   | Par
      Value |   |   | Capital     |   |   | Stage       |   |   | Total      |  
|                                                    |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |            |  
|Balance, December 31, 2003                          |            |  | 17,305,596   |   | $ | 17,304          |   | $ | 3,110,855   |   | $ | (4,286,668  | ) | $ | (1,158,509 | )
|Non-cash compensation charge                        |            |  | -            |   |   | -               |   |   | 161,450     |   |   | -           |   |   | 161,450    |  
|Issue of stock for cash
      pursuant to the       |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |           
|exercise of
      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
      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   | )
|                                                    |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |            |  
|Balance, December 31, 2004                          |            |  | 18,972,675   |   |   | 18,971          |   |   | 3,557,111   |   |   | (4,803,992  | ) |   | (1,227,910 | )
|Non-cash compensation charge                        |            |  | -            |   |   | -               |   |   | 25,700      |   |   | -           |   |   | 25,700     |  
|Issue of stock for cash
      pursuant to the       |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |           
|exercise of
      warrants                          |  at $0.07 |  | 75,820       |   |   | 76              |   |   | 5,232       |   |   | -           |   |   | 5,308      |  
|                                                    |  at $0.10 |  | 357,760      |   |   | 358             |   |   | 35,417      |   |   | -           |   |   | 35,775     |  
|                                                    |  at $0.11 |  | 299,724      |   |   | 300             |   |   | 31,270      |   |   | -           |   |   | 31,570     |  
|                                                    |  at $0.21 |  | 16,803       |   |   | 17              |   |   | 3,483       |   |   | -           |   |   | 3,500      |  
|Issue of stock for debt                             |  at $0.39 |  | 635,901      |   |   | 636             |   |   | 249,524     |   |   | -           |   |   | 250,160    |  
|Issuance of stock for services                      |  at $0.25 |  | 950,000      |   |   | 950             |   |   | 236,550     |   |   | -           |   |   | 237,500    |  
|                                                    |  at $0.36 |  | 100,000      |   |   | 100             |   |   | 35,900      |   |   | -           |   |   | 36,000     |  
|                                                    |  at $0.50 |  | 121,000      |   |   | 121             |   |   | 60,379      |   |   | -           |   |   | 60,500     |  
|                                                    |  at $0.54 |  | 20,000       |   |   | 20              |   |   | 10,680      |   |   | -           |   |   | 10,700     |  
|                                                    |  at $0.84 |  | 50,000       |   |   | 50              |   |   | 41,950      |   |   | -           |   |   | 42,000     |  
|Issuance of stock dividend                          |  at $0.65 |  | 4,060,643    |   |   | 4,061           |   |   | 2,635,357   |   |   | (2,639,418  | ) |   | -          |  
|Net loss                                            |            |  | -            |   |   | -               |   |   | -           |   |   | (517,270    | ) |   | (517,270   | )
|                                                    |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |            |  
|Balance, December 31, 2005                          |            |  | 25,660,326   |   |   | 25,660          |   |   | 6,928,553   |   |   | (7,960,680  | ) |   | (1,006,467 | )
|                                                    |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |            |  
|Issue of stock for cash pursuant to a
      private |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |           
|placement                                           |  at $0.40 |  | 200,000      |   |   | 200             |   |   | 79,800      |   |   | -           |   |   | 80,000     |  
|Issue of stock for finders fee                     |  at $0.40 |  | 100,000      |   |   | 100             |   |   | 39,900      |   |   | -           |   |   | 40,000     |  
|Share issue costs                                   |            |  | -            |   |   | -               |   |   | (43,000     | ) |   | -           |   |   | (43,000    | )
|Beneficial conversion feature on                    |            |  |              |   |   |                 |   |   |             |   |   |             |   |   |            |  
|convertible debt                                    |            |  | -            |   |   | -               |   |   | 77,800      |   |   | -           |   |   | 77,800     |  
|Net loss                                            |            |  | -            |   |   | -               |   |   | -           |   |   | (401,655    | ) |   | (401,655   | )

Contd

SEE ACCOMPANYING NOTES

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED                                     
|---------------------------------------------------------------------------------
|(A Development Stage Company)                                                    
|INTERIM STATEMENTS OF CHANGES IN CAPITAL DEFICIT                                 
|For the period from February 28, 1989 (Date of Inception)
      to March 31, 2009
|(Stated in U.S. Dollars)                                                         
|(Unaudited)                                                                      

|                                                    |            |   |              |  |   |                 |  |         |             |  |   | Deficit     |   |         |            |  
|--------------------------------------------------- | ---------- | - | ------------ |  | - | --------------- |  | ------- | ----------- |  | - | ----------- | - | ------- | ---------- | -
|                                                    |            |   |              |  |   |                 |  |         |             |  |   | Accumulated |   |         |            |  
|                                                    |            |   |              |  |   |                 |  |         | Additional  |  |   | During the  |   |         |            |  
|                                                    |            |   | Common Stock |  |   | Paid-In         |  |         | Development |  |   |             |  
|                                                    |            |   | Shares       |  |   | Par
      Value |  |         | Capital     |  |   | Stage       |   |         | Total      |  
|                                                    |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Balance, December 31, 2006                          |            |   | 25,960,326   |  | $ | 25,960          |  | $       | 7,083,053   |  | $ | (8,362,335  | ) | $       | (1,253,322 | )
|Issue of stock for cash
      pursuant to a private |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |           
|placement                                           |  at $0.25 |   | 200,000      |  |   | 200             |  |         | 49,800      |  |   | -           |   |         | 50,000     |  
|Issuance of stock for services                      |  at $0.20 |   | 700,000      |  |   | 700             |  |         | 139,300     |  |   | -           |   |         | 140,000    |  
|Non-cash compensation
      charge                  |            |   | -            |  |   | -               |  |         | 29,240      |  |   | -           |   |         | 29,240     |  
|Beneficial
      conversion feature on convertible  |            | - |              |  | - |                 |  | 39,600  |             |  | - |             |   | 39,600  |           
|debt                                                |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Net loss                                            |            |   | -            |  |   | -               |  |         | -           |  |   | (519,345    | ) |         | (519,345   | )
|                                                    |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Balance, December 31, 2007                          |            |   | 26,860,326   |  |   | 26,860          |  |         | 7,340,993   |  |   | (8,881,680  | ) |         | (1,513,827 | )
|Issuance of stock for
      services                |  at $0.07 |   | 750,000      |  |   | 750             |  |         | 51,250      |  |   | -           |   |         | 52,000     |  
|Non-cash compensation charge                        |            |   | -            |  |   | -               |  |         | 251,078     |  |   | -           |   |         | 251,078    |  
|Beneficial conversion feature on
      convertible  |            | - |              |  | - |                 |  | 122,262 |             |  | - |             |   | 122,262 |           
|debt                                                |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Net loss                                            |            |   | -            |  |   | -               |  |         | -           |  |   | (723,811    | ) |         | (723,811   | )
|                                                    |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Balance, December 31, 2008                          |            |   | 27,610,326   |  |   | 27,610          |  |         | 7,765,583   |  |   | (9,605,491  | ) |         | (1,812,298 | )
|Net loss                                            |            |   | -            |  |   | -               |  |         | -           |  |   | (30,151     | ) |         | (30,151    | )
|                                                    |            |   |              |  |   |                 |  |         |             |  |   |             |   |         |            |  
|Balance, March
      31, 2009                       |            |   | 27,610,326   |  | $ | 27,610          |  | $       | 7,765,583   |  | $ | (9,635,642  | ) | $       | (1,842,449 | )

SEE ACCOMPANYING NOTES

---

|1. | Nature of Operations and Ability to Continue as a
      Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company is in the development stage and is devoting
      its efforts to developing real estate projects in the Middle
  East.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next fiscal year.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At March 31, 2009, the Company had not yet achieved profitable
      operations, has an accumulated deficit of $9,635,642 since its inception,
      has a working capital deficiency of $1,050,450 and expects to incur
      further losses in the development of its business, all of which casts
      substantial doubt about the Companys ability to continue as a going
      concern. In addition to funding the Companys general, administrative and
      corporate expenses the Company is obligated to address its current
      obligations totaling $1,054,562. To the extent that cash needs are not
      achieved from operating cash flow and existing cash on hand, the Company
      will be required to raise necessary cash through shareholder loans, equity
      issuances and/or other debt financing. Amounts raised will be used to
      continue the development of the Company's investment activities, and for
      other working capital purposes.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Companys ability to continue as a going concern is
      dependent upon its ability to generate future profitable operations and/or
      to obtain the necessary financing to meet its obligations and repay its
      liabilities arising from normal business operations when they come due.
      Management has no formal plan in place to address this concern but
      considers that the Company will be able to obtain additional funds by
      equity financing and/or related party advances; however there is no
      assurance of additional funding being available. The Company has
      historically satisfied its capital needs primarily by issuing equity
      securities. Management plans to continue to provide for its capital needs
      during the year ended December 31, 2009, by issuing equity
    securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The accompanying unaudited interim financial statements
      have been prepared by 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, 2008, included in the Companys
      10-K Annual Report as filed with the United States Securities and Exchange
      Commission.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The results of operations for the three months ended
      March 31, 2009 are not indicative of the results that may be expected for
      the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Deferred Investment Costs Note 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Deferred investment costs consist of consultants fees
      and payments to reimburse Star Leisure and Entertainme nt Inc. with
      respect to the acquisition of Gulf Star World Development W.L.L., net of a
      write -down to a nominal value of $1 (December 31, 2008 -
  $1).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

1

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|3. | Loans Payable |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|-- | ------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- |  | - | ------------
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | March 31, |  |   | December 31,
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   | 2009      |  |   | 2008        
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|   | a)            | Loan payable to a company controlled by a director of the
      Company including accrued interest of $4,102 (December 31, 2008 - $3,789).
      The loan is unsecured, bearing interest at 12% per annum and is repayable
      on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | $ | 10,904    |  | $ | 10,591      
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|   | b)            | Loans payable to companies controlled by directors of the
      Company. The loans are unsecured, non-interest bearing, and repayable upon
      demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   | 34,478    |  |   | 23,417      
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|   | c)            | Loan payable to a company controlled by a director of the
      Company, including accrued interest payable of $22,281 (December 31, 2008
      - $17,804), pursuant to a Convertible Loan Agreement. The loan is
      unsecured, bearing interest at 10% per annum and is repayable on demand.
      The lender may at anytime convert the principal sum into units of the
      Company. Each unit will consist of one common share plus one common share
      purchase warrant. The principal sum of $163,766 may be converted into
      2,320,858 units. Conversion of these loans and resulting associated
      warrants to equity will be based on the conversion price set at the time
      the principal amount was drawn ranging from $0.05 to $0.23. During the
      period ended March 31, 2009 an amount of $Nil (December 31, 2008 -
      $19,660) was recognized as the intrinsic value of the beneficial
      conversion feature of these loans and this amount was included in interest
      expense. Upon conversion of this loan, the fair value of the warrants,
      ($73,685) would be recognized as an interest expense and credited to
      additional paid- in capital. |  |   | 186,047   |  |   | 181,570     
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|   | d)            | Loan payable to a company controlled by a director of the
      Company, including accrued interest of $28,889 (December 31, 2008 -
      $22,052), pursuant to a Convertible Loan Agreement. The loan is unsecured,
      bearing interest at 10% per annum and is repayable on demand. The lender
      may at anytime convert the principal sum into units of the Company. Each
      unit will consist of one common share plus one common share purchase
      warrant. The principal sum of $255,209 may be converted into 4,526,436
      units. Conversion of this loan and resulting associated warrants to equity
      will be based on the conversion price set at the time the principal amount
      was drawn ranging from $0.05 to $0.12. During the period ended March 31,
      2009 an amount of $Nil (December 31, 2008 - $102,602) was recognized as
      the intrinsic value of the beneficial conversion feature of these loans
      and this amount was included in interest expense. Upon conversion of this
      loan, the fair value of the warrants ($113,338) would be recognized as an
      interest expense and credited to additional paid-in capital.                 |  |   | 284,098   |  |   | 277,261     
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |           |  |   |             
|   |               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $ | 515,527   |  | $ | 492,839     

2

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|4. | Capital Stock Notes 3 and 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On June 1, 2008, the Company issued 750,000 common shares
      to two consultants for consulting services to be provided over a twelve
      month period, valued at $52,000. The Company determined the fair value of
      the shares issued using the market price on the share issuance date. In
      September 2008 the Company terminated its agreement with one of the
      consultants and the remaining value of these shares was charged to
      operations. As a result as at March 31, 2009, $4,000 (December 31, 2008 -
      $10,000) is remaining in prepaid expenses.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Class A Convertible Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Class A convertible preferred shares issued in 2003
      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.                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The aggregate liquidation value of the Class A
      convertible preferred shares is $792,000. A merger or consolidation of the
      Company that results in the Companys stockholders immediately prior to
      the transaction not holding at least 50% of the voting power of the
      surviving entity shall be deemed a liquidation event.                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In previous periods, 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 fair value of each option grant was estimated on the
      date of the grant using the Black-Scholes option valuation model. The
      Black-Scholes option valuation 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | As no options were granted during the three month periods
      ending March 31, 2008 and 2009, there was no non-cash compensation charge
      for the three-month periods ended March 31, 2008 or
2009.                                                                                                                                                                                                                                                                                                                                                                                

3

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|4. | Capital Stock Notes 3 and 5  (contd)
      Stock-based Compensation  (contd)                             
|-- | --------------------------------------------------------------------------------------------------------------
|   |                                                                                                               
|   | During the period ended March 31, 2009, the change in
      share purchase options outstanding are as
follows:

| |                                          |  |            |   |  | Weighted |  |  | Weighted         |  |   |           | 
| | ---------------------------------------- |  | ---------- | - |  | -------- |  |  | ---------------- |  | - | --------- | 
| |                                          |  |            |   |  | Average  |  |  | Average          |  |   | Aggregate | 
| |                                          |  |            |   |  | Exercise |  |  | Remaining        |  |   | Intrinsic | 
| |                                          |  | Shares     |   |  | Price    |  |  | Contractual Life |  |   | Value     | 
| |                                          |  |            |   |  |          |  |  |                  |  |   |           | 
| | Options outstanding at December 31, 2007 |  | 2,087,000  |   |  | $ 0.23   |  |  | 0.96 years       |  | $ | -         | 
| | Granted during the year                  |  | 4,225,000  |   |  | $ 0.15   |  |  | 5.00 years       |  |   | -         | 
| | Cancelled during the period              |  | (2,187,000 | ) |  | $ 0.23   |  |  | 0.73 years       |  |   | -         | 
| | Options outstanding at December 31, 2008 |  |            |   |  |          |  |  |                  |  |   |           | 
| | and March 31, 2009                       |  | 4,125,000  |   |  | $ 0.15   |  |  | 4.20 years       |  | $ | -         | 

At March 31, 2009, the Company had
share purchase options outstanding as follows:

| | Number of Options | Exercise Price | Expiry Date       
| | ----------------- | -------------- | ------------------
| |                   |                |                   
| | 3,725,000         | $0.15          | June 1, 2013      
| | 400,000           | $0.15          | September 30, 2013
| | 4,125,000         |                |                   

At March 31, 2009 and December 31, 2008
all of the outstanding share purchase options were exercisable.

4

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|4. | Capital Stock Notes 3 and 5  (contd)                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Acquisition of Gulf Star World Development
  W.L.L.                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | By a letter of agreement dated July 11, 2002, amended
      October 10, 2002, May 10, 2003 and September 30, 2003, June 30, 2004, July
      11, 2005 and August 9, 2006, the Company agreed to purchase 80% of the
      outstanding shares of Gulf                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Star World Development W.L.L. (Gulf Star), a Bahrain
      corporation, from Star Leisure & Entertainment Inc. (Star Leisure).
      Star Leisure is controlled by a director of the Company and is based in
      British Columbia, Canada. Gulf Star is the 100% owner and developer of the
      residential and tourist project known as the Dream Island Resort, located
      on the north coast of Bahrain at Manama City.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | To acquire 80% of Gulf Star, the Company must issue five
      million common shares at $0.125 per share. The shares are to be issued
      over a three-year period as follows:                                                                                                                                                                                                                                                     

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

In addition, the Company shall make
cash payments to Star Leisure totaling $100,000 to cover a portion of hard costs
accumulated by Star Leisure in progressing the Dream Island Project. During the
year ended December 31, 2003, the Company paid $34,210 as partial payment toward
the $100,000 payment. The remaining balance of $65,790 is due on demand. 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 into
escrow 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 will be
released from escrow in stages as the dredging contract progresses. No value was
recorded for these shares due to the contingent nature of their release from
escrow. During the year ended December 31, 2006, these shares were cancelled. At
December 31, 2006, although work has commenced on the Dream Island Project,
there has not yet been sufficient progress to warrant issuance of the shares. An
agents fee of 0.5% of the value of the shares released will be payable.

On March 13, 2006, the Ministry of
Finance, Bahrain (MOFB) notified Gulf Star that due to a lack of progress and
failure to advance the project in a timely basis, the MOFB intends to seek
termination of the lease contract for the Dream Island site and have Gulf Star
pay all associated expenses incurred for the enforcement thereof. In addition,
the MOFB has indicated that it reserves the right to claim damages towards all
losses it has incurred and all gains denied. The Company, Gulf Star, and Star
Leisure intend to oppose the action by the MOFB. However, due to the uncertainty
of the future viability of the Dream Island project, management has written-down
the associated deferred investment costs to a nominal value of $1.

As at March 31, 2009 there has been no
activity or changes involving the Dream Island project since March 13, 2006.

5

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|4. | Capital Stock Notes 3 and 5  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Acquisition of Port Residence Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company entered into a letter of intent dated January
      7, 2008, to purchase 100% of the outstanding shares of a Turkish company
      (TurkCo) to be formed and, thereby, acquiring a 100% interest in the
      Port Residence Project, a real estate development project, in Calkaya,
      Turkey. An initial option will allow the Company to purchase up to 30%
      of the outstanding shares of Calkaya TurkCo. Upon full exercise of the
      initial option, the Company shall be entitled to exercise a second
      option to purchase the remaining outstanding shares of Calkaya TurkCo.,
      as follows:

| | a) | The Company shall be granted the option to purchase, on a
      pro-rata basis, up to 30% of the outstanding shares of                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | TurkCo for compensation as described below (the Initial
      Share Purchase Option). The Company may exercise the share purchase
      option based upon construction progress of the Project as
  follows:                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | b) | The shareholders of TurkCo shall grant a secondary option
      to the Company to purchase on a pro-rata basis the remaining 70% of the
      outstanding shares of TurkCo at the price as described below, (the Second
      Share Purchase Option). The Second Share Purchase Option may only be
      exercised by the Company upon full exercise of the Initial Share Purchase Option, unless TurkCo agrees to
  allow an earlier exercise as requested by the Company.                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | c) | Compensation of Initial and Second Share Purchase
      Options:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company shall have the option to pay the full
      exercise price of the Share Purchase Options either in cash, or by issuing
      common shares of the Company at the higher value of either, $2.00 per
      share or the discounted market price of the Companys share, as quoted on
      the OTC:BB Stock Exchange where the Discounted Market Price is defined
      by calculating the average previous 10 day closing price of the Company
      shares as of the Exercise Date in question and reducing that price by
      25%.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The letter of intent is subject to the completion of a
      formal agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

6

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|5. | Non-Cash Transactions                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                            
|   | Investing and financing activities that do not have a
      direct impact on cash flows are excluded from the statements 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 |  |               |  | Weighted        |  |                   | 
| | ---- | --------------------------------------- | --------------- |  | ------------- |  | --------------- |  | ----------------- | 
| |      |                                         | Preferred       |  | Number of     |  | Average Price   |  |                   | 
| | Year |                                         | Shares          |  | Common Shares |  | Per
      Share |  | Total             | 
| |      |                                         |                 |  |               |  |                 |  |                   | 
| | 1995 | Consulting fee                          | -               |  | 50,000        |  | $0.03           |  | $ 1,500           | 
| | 1998 | Management fee                          | -               |  | 7,000,000     |  | $0.001          |  | 7,000             | 
| | 1998 | Consulting fee                          | -               |  | 620,000       |  | $0.01           |  | 6,200             | 
| | 2000 | Finders fee                             | -               |  | 50,000        |  | $0.001          |  | 50                | 
| | 2001 | Consulting fee                          | -               |  | 708,406       |  | $2.07           |  | 1,468,254         | 
| | 2002 | Deferred investment cost                | -               |  | 1,300,000     |  | $0.05           |  | 65,000            | 
| | 2002 | Consulting fee                          | -               |  | 684,143       |  | $0.19           |  | 131,400           | 
| | 2002 | Debt settlement                         | -               |  | 680,886       |  | $0.20           |  | 138,006           | 
| | 2003 | Consulting fee                          | -               |  | 1,450,000     |  | $0.14           |  | 203,000           | 
| | 2003 | Termination fee                         | 198,000         |  | -             |  | $4.00           |  | 792,000           | 
| | 2004 | Loan conversion                         | -               |  | 825,364       |  | $0.06           |  | 48,537            | 
| | 2004 | Loan settlement                         | -               |  | 613,000       |  | $0.07           |  | 45,000            | 
| | 2004 | Consulting fee                          | -               |  | 360,000       |  | $0.40           |  | 142,500           | 
| | 2004 | Deferred investment cost (cancellation) | -               |  | (1,300,000)   |  | $0.05           |  | (65,000)          | 
| | 2005 | Communications                          | -               |  | 56,000        |  | $0.50           |  | 28,000            | 
| | 2005 | Consulting fees                         | -               |  | 1,135,000     |  | $0.29           |  | 333,700           | 
| | 2005 | Legal fees                              | -               |  | 50,000        |  | $0.50           |  | 25,000            | 
| | 2005 | Loan conversion                         | -               |  | 635,901       |  | $0.39           |  | 250,160           | 
| | 2005 | Stock dividend                          | -               |  | 4,120,643     |  | $0.65           |  | 2,678,418         | 
| | 2006 | Finders fee                            | -               |  | 100,000       |  | $0.40           |  | 40,000            | 
| | 2007 | Consulting fees                         | -               |  | 700,000       |  | $0.20           |  | 140,000           | 
| | 2008 | Consulting fees                         | -               |  | 750,000       |  | $0.07           |  | 52,000            | 
| |      |                                         |                 |  |               |  |                 |  |                   | 
| |      |                                         | 198,000         |  | 20,589,343    |  |                 |  | $
      6,530,725 | 

These amounts have been excluded from
the investing and financing activities of the statements of cash flows.

7

---

|STRATEGIC INTERNET INVESTMENTS, INCORPORATED
|--------------------------------------------
|(A Development Stage Company)               
|NOTES TO THE INTERIM FINANCIAL STATEMENTS   
|March 31, 2009                              
|(Stated in U.S. Dollars)                    
|(Unaudited)                                 

|6. | Related Party Transactions Notes 2 and
  3                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                  
|   | The Company was charged the following by stockholders,
      directors, by companies controlled by directors and/or stockholders of the
      Company, and by companies with directors in
common:

| |                    |   |                              |  |   |           |  |   | Cumulative from | 
| | ------------------ | - | ---------------------------- |  | - | --------- |  | - | --------------- | 
| |                    |   |                              |  |   |           |  |   | February 28,    | 
| |                    |   |                              |  |   |           |  |   | 1989 (Date of   | 
| |                    |   |                              |  |   |           |  |   | Inception) to   | 
| |                    |   | Three months ended March 31, |  |   | March 31, | 
| |                    |   | 2009                         |  |   | 2008      |  |   | 2009            | 
| |                    |   |                              |  |   |           |  |   |                 | 
| | Consulting fees    | $ | -                            |  | $ | -         |  | $ | 249,043         | 
| | Interest           |   | 11,627                       |  |   | 9,388     |  |   | 270,847         | 
| | Management fees    |   | -                            |  |   | 46,125    |  |   | 546,325         | 
| | Office and general |   | -                            |  |   | -         |  |   | 26,944          | 
| | Rent               |   | -                            |  |   | 6,000     |  |   | 130,232         | 
| |                    |   |                              |  |   |           |  |   |                 | 
| |                    | $ | 11,627                       |  | $ | 61,513    |  | $ | 1,223,391       | 

At March 31, 2009, accounts payable
includes $442,648 (December 31, 2008 - $442,684) due to directors of the Company
and companies controlled by directors of the Company in respect of unpaid
management fees and expenses incurred on behalf of the Company.

At March 31, 2009, accounts payable
also includes $15,527 (December 31, 2008 - $15,527) of expenses for operating
costs paid on behalf of the Company by companies with directors in common.

The Company entered into two Management
Services Agreements dated January 1, 2007 with a director and a company
controlled by a director of the Company. Under the terms of these agreements
they will each be paid $7,500 per month, plus taxes where applicable, for
management services. These agreements are for a 24-month period and expired on
December 31, 2008. Effective September 12, 2008, one of the agreements was
terminated and the other was not renewed subsequent to December 31, 2008. If the
Company is unable to pay for the services, the consultant may elect to settle
any portion of outstanding amounts plus interest with units of the Company. Each
unit shall consist of one common share and one share purchase warrant entitling
the holder to purchase one additional common share of the Company. The price for
the units and warrants will be determined based on a discount to the 10 day
average market price ranging from 50% to 60%, but no less than $0.05 per share.

Subsequent to March 31, 2009, the
Company was advanced $17,486 in loans payable from companies controlled by
directors of the Company. The loans are unsecured, non-interest bearing, and
repayable upon demand.

8

---

|2. | Managements Discussion andAnalysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The following discussion should be read in conjunction with our unaudited interim financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Our unaudited interim financial statements are stated in United States dollars and are prepared in accordance with United                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | States generally accepted accounting principles (GAAP).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 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 has been devoting its business efforts to real estate development projects located in Bahrain and Turkey. Current projects include the Dream Island Resort project which is located in Manama, Bahrain; and the Port
Residence Project located in Calkaya, Turkey.                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Dream Island Resort Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Dream Island Resort project is located 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 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. At December 31, 2003 the Company had paid $34,210, with the balance of $65,790 to
be paid on demand.                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On March 13, 2006, the Ministry of Finance, Bahrain (MOFB) notified Gulf Star that due to a lack of progress and failure to advance the project in a timely basis, the MOFB intends to seek termination of the lease
contract for the Dream Island site. The Company, Gulf Star, and Star Leisure intend to oppose the action by the MOFB. However, due to the uncertainty of the future viability of the Dream Island project, management has written-down the associated
deferred development costs to a nominal value of $1.00 at December 31, 2005.                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Dream Island project require 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, is to be paid by the issuance of 1,268,750 Class A Convertible Preferred Shares in the capital of the Company at a deemed price of
$4.00 per share to Robodh Contracting Establishment, Manama, Bahrain. The total value of the Dredging and Reclamation Works contract is $5,075,000.                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In August 2004, limited 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 transported and dumped 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.

---

As at March 31, 2008 there has been no
activity or changes involving the Dream Island project since March 13, 2006.

Port Residence Project

The Company entered into a Letter of
Intent to potentially acquire by option up to a 100% indirect interest in the
Port Residence Project by purchasing the outstanding shares of a Turkish
company. The Port Residence Project is a real estate development project that
will be located on a 16.5 hectare parcel of land in Calkaya, near Antalya,
Turkey.

The letter of intent dated January 7,
2008, provides the Company the potential to purchase 100% of the outstanding
shares of a Turkish company (TurkCo) to be formed and, thereby, acquiring a
100% interest in the Port Residence

Project, a real estate development
project, in Calkaya, Turkey, as follows:

| | 1) | The Company shall be granted the option to purchase, on a
      pro-rata basis, up to 30% of the outstanding shares of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | TurkCo for compensation as described below (the Initial
      Share Purchase Option). The Company may exercise the share purchase
      option based upon construction progress of the Project as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 2) | The shareholders of TurkCo shall grant a secondary option
      to the Company to purchase on a pro -rata basis the remaining 70% of the
      outstanding shares of TurkCo at the price as described below, (the Second
      Share Purchase Option). The Second Share Purchase Option may only be
      exercised by the Company upon full exercise of the Initial Share Purchase
      Option, unless TurkCo agrees to allow an earlier exercise as requested by
      the Company.                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 3) | Compensation of Initial and Second Share Purchase
      Options:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | The Company shall have the option to pay the full
      exercise price of the Share Purchase Options either in cash, or by issuing
      common shares of the Company at the higher value of either, $2.00 per
      share or the discounted market price of the Companys share, as quoted on
      the OTC:BB Stock Exchange where the Discounted Market Price is defined
      by calculating the average previous 10 day closing price of the Company
      shares as of the Exercise Date in question and reducing that price by 25%.
      Any issuance of common shares of the Company would occur as of the date of
      the Option Exercise Notice, under a Restricted Rule 144 Reg. S share
      issuance.

The letter of intent is subject to the
completion of a formal agreement.

Plan of Operation

The Company has been devoting its
business efforts to real estate development projects located in Bahrain and
Turkey. Current projects include the Dream Island Resort project is located in
Manama, Bahrain; and the Port Residence Project located in Calkaya, Turkey. The
Company plans to continue perusing these real estate development projects and to
investigate new real estate development projects during its 2009 fiscal year.

Our estimated cash expenses over the
next twelve months are as follows:

|Accounting , audit, and legal fees  | $ | 60,000  | 
|----------------------------------- | - | ------- | 
|Consulting and management fees      |   | 10,000  | 
|Interest                            |   | 20,000  | 
|General and administrative expenses |   | 3,000   | 
|Regulatory and transfer agent fees  |   | 7,000   | 
|                                    | $ | 100,000 | 

---

To date we have funded our operations
primarily with loans from shareholders and issue new equity. In addition to
funding the Companys general, administrative and corporate expenses the Company
is obligated to address its current obligations totalling $1,054,562. To the
extent that cash needs are not achieved from operating cash flow and existing
cash on hand, the Company will be required to raise necessary cash through
shareholder loans, equity issuances and/or other debt financing. Amounts raised
will be used to continue the development of the Company's investment activities,
and for other working capital purposes, which may be dilutive to existing
shareholders. The company currently has no agreement in place to raise funds for
current liabilities and no guarantee can be given that we will be able to raise
funds for this purpose on terms acceptable to the company. Failure to raise
funds for general, administrative and corporate expenses and current liabilities
could result in a severe curtailment of the company operations.

Results of Operations

During the quarter ended March 31,
2009, the Company incurred general and administrative expenses totaling $32,891
compared to $101,957 during the same period of the previous year.

The changes in our general and
administrative expenses for the three month period ended March 31, 2009 when
compared to the three month period ended March 31, 2009 was primarily due
to:

| | a) | The increase in accounting, audit, and legal fees during
      the three month period ended March 31, 2009 versus March 31, 2008 was due
      to a general increase in the fees charged by the consultants and
      professionals who provide these services. In addition, there has been an
      increase in the amount of time spent by these consultants and
      professionals to ensure the Company is in compliance with the increased
      reporting requirement imposed by regulatory authorities.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | b) | The decrease in consulting expense is mainly due to the
      issuance of shares for consulting services options during 2008, while no
      new consulting agreements were entered into during the current
    period.                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | c) | Management fees declined by $46,125 during the current
      period as a result of a director resigning his position as CEO in
      September 2008, and the resulting termination of his management contract
      fees at that time. And the termination of the other remaining management
      contract as of December 31, 2008.                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | d) | The increase in interest of $2,239 is attributed to the
      principal balance on its loans increasing compared to the comparative 2008
      period.                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | e) | Regulatory and transfer agent fees increased by $1,915.
      During the three month period ended March 31, 2008 the Company recorded a
      $2,000 reversal of an over-accrued liability recorded in prior years,
      relating to transfer agent fees.                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | f) | Rent decreased because the Company terminated its
      Vancouver office facilities concurrent with the resignation of the former
      CEO in September 2008.                                                                                                                                                                                                                                                                                                                                                 

Funding for operating and investing
activities was provided by both non-interest and interest bearing advances and
loans from related parties, including directors of the Company, and companies
controlled by these directors.

As of March 31, 2009, the Company had
total current assets of $4,112 and total liabilities of $1,054,562. As of March
31, 2009, the Company had cash of $112 and a working capital deficiency of
$1,050,450 as of March 31, 2009 compared to cash on hand of $256 and a working
capital deficiency of $1,020,299 for the year ended December 31, 2008. We
anticipate that we will incur approximately $100,000 for operating expenses,
including professional, legal and accounting expenses associated with our
reporting requirements under the Exchange Act during the next twelve months.
In addition to funding the Companys
general, administrative and corporate expenses the Company is obligated to
address its current obligations totaling $1,054,562. To the extent that cash
needs are not achieved from operating cash flow and existing cash on hand, the
Company will be required to raise necessary cash through shareholder loans,
equity issuances and/or other debt financing. Amounts raised will be used to
continue the development of the Company's investment activities, and for other
working capital purposes. Accordingly, we will need to obtain additional
financing in order to continue our planned business activities.

---

Cash used in operating activities for
the three month period ended March 31, 2009 was $11,205 as compared to cash used
by operating activities for the same period in 2008 of $2,281. The increase in
cash used in operating activities was primarily due to the decrease in cash
expenditures on consulting fees, management fees and rent.

The Company has the following loans
outstanding as of March 31, 2009:

A $10,904 loan payable to a company
controlled by a director of the Company including accrued interest of $4,102
(December 31, 2008 - $3,789). The loan is unsecured, bearing interest at 12% per
annum and is repayable on demand.

$34,478 in loans payable to companies
controlled by directors of the Company are unsecured, non-interest bearing, and
repayable upon demand.

A $186,047 loan payable to a company
controlled by a director of the Company, including accrued interest payable of
$22,281 (December 31, 2008 - $17,804), pursuant to a Convertible Loan Agreement.
The loan is unsecured, bearing interest at 10% per annum and is repayable on
demand. The lender may at anytime convert the principal sum into units of the
Company. Each unit will consist of one common share plus one common share
purchase warrant. The principal sum of $163,766 may be converted into 2,320,858
units. Conversion of these loans and resulting associated warrants to equity
will be based on the conversion price set at the time the principal amount was
drawn ranging from $0.05 to $0.23. During the three month period ended March 31,
2009 an amount of $Nil (2008 - $Nil) was recognized as the intrinsic value of
the beneficial conversion feature of these loans and this amount was included in
interest expense. Upon conversion of this loan, the fair value of the warrants
($73,685) would be recognized as an interest expense and credited to additional
paid-in capital.

A $284,098 loan payable to a company
controlled by a director of the Company, including accrued interest of $28,889
(December 31, 2008 - $22,052), pursuant to a Convertible Loan Agreement. The
loan is unsecured, bearing interest at 10% per annum and is repayable on demand.
The lender may at anytime convert the principal sum into units of the Company.
Each unit will consist of one common share plus one common share purchase
warrant. The principal sum of $255,209 may be converted into 4,526,436 units.
Conversion of this loan and resulting associated warrants to equity will be
based on the conversion price set at the time the principal amount was drawn
ranging from $0.05 to $0.12. During the three month period ended March 31, 2009
an amount of $Nil (2008 - $Nil) was recognized as the intrinsic value of the
beneficial conversion feature of these loans and this amount was included in
interest expense. Upon conversion of this loan, the fair value of the warrants
($113,338) would be recognized as an interest expense and credited to additional
paid-in capital.

Subsequent to March 31, 2009, the
Company was advanced $17,486 in loans payable from companies controlled by
directors of the Company. The loans are unsecured, non-interest bearing, and
repayable upon demand.

Going Concern

The audited financial statements
accompanying this report have been prepared on a going concern basis, which
implies that our company will continue to realize its assets and discharge its
liabilities and commitments in the normal course of business. Our company has
not generated revenues since inception and has never paid any cash dividends and
is unlikely to pay cash dividends or generate earnings in the immediate or
foreseeable future. The continuation of our company as a going concern is
dependent upon the continued financial support from our shareholders, the
ability of our company to obtain necessary equity financing to achieve our
operating objectives, and the attainment of profitable operations. As of March
31, 2009, we had cash of $112 and we estimate that we will require approximately
$100,000 to fund our business operations over the next twelve months. In
addition to funding the Companys general, administrative and corporate expenses
the Company is obligated to address its current obligations totaling $1,054,562.
To the extent that cash needs are not achieved from operating cash flow and
existing cash on hand, the Company will be required to raise necessary cash
through shareholder loans, equity issuances and/or other debt financing. Amounts
raised will be used to continue the development of the Company's investment
activities, and for other working capital purposes.

Accordingly, we do not have sufficient
funds for planned operations and we will be required to raise additional funds
for operations after that date.

---

These circumstances raise substantial
doubt about our ability to continue as a going concern, as described in the Note
1 of our March 31, 2009 unaudited financial statements. The financial statements
do not include any adjustments that might result from the outcome of that
uncertainty.

The continuation of our business is
dependent upon us raising additional financial support. The issuance of
additional equity securities by us could result in a significant dilution in the
equity interests of our current stockholders. Obtaining commercial loans,
assuming those loans would be available, will increase our liabilities and
future cash commitments.

There are no assurances that we will be
able to obtain further funds required for our continued operations. We are
pursuing various financing alternatives to meet our immediate and long-term
financial requirements. There can be no assurance that additional financing will
be available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will be forced to scale down or perhaps even
cease the operation of our business.

Future Financings

As of March 31, 2009, we had cash of
$112 and we estimate that we will require approximately $100,000 to fund our
business operations over the next twelve months. In addition to funding the
Companys general, administrative and corporate expenses the Company is
obligated to address its current obligations totaling $1,054,562. Accordingly,
we do not have sufficient funds for planned operations and we will be required
to raise additional funds for operations after that date. We anticipate
continuing to rely on equity sales of our common shares or shareholder loans in
order to continue to fund our business operations. Issuances of additional
shares will result in dilution to our existing stockholders. There is no
assurance that we will achieve any additional sales of our equity securities or
arrange for debt or other financing to fund our planned activities.

Off-balance sheet arrangements

As of the date of this Report, the
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the company's financial
condition, change in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors. The term "off-balance sheet arrangement" generally means
any transaction, agreement, or other contractual arrangement to which an entity
unconsolidated with the Company is a party under which the Company has (i) any
obligation arising under a guarantee contract, derivative instrument or variable
interest; or (ii) a retained or contingent interest in assets transferred to
such entity or similar arrangement that serves as credit, liquidity or market
risk support for such assets.

|3. | Quantitative and Qualitative Disclosures About Market
      Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has no market risk sensitive
    instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In connection with the restatement of our financial
      results for the year ended December 31, 2007, under the direction of our
      management, we have re-evaluated certain disclosure controls and
      procedures and internal controls over financial reporting. In connection
      with the restatement we identified a material weakness in our internal
      controls and procedures relating to the accounting treatment of our past
      acquisitions, stock-based compensation calculations, settlement of debts
      and the determination of impairment.                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As required by Rule 13(a)-15 under the Exchange Act, in
      connection with this quarterly report on Form 10-Q, under the direction of
      our Chief Executive Officer and Chief Financial Officer, we have evaluated
      our disclosure controls and procedures as of March 31, 2009, our
      disclosure controls and procedures were ineffective as discussed in
      greater detail above. As of the date of this filing, we are still in the
      process of remediating such material weaknesses in our internal controls
      and procedures. Additionally, we are currently inactive as we seek new
      business opportunities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | It should be noted that while our management believes our
      disclosure controls and procedures provide a reasonable level of
      assurance, they do not expect that our disclosure controls and procedures
      or internal controls will prevent all error and all fraud. A control
      system, no matter how well conceived or operated, can provide only
      reasonable, not absolute, assurance that the objectives of the control
      system are met. Further, the design of a control system must reflect the
      fact                                                                                                        

---

that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the controls. The design of any
system of internal control is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.

There were no changes in our internal
control over financial reporting during the three month period ended March 31,
2009 that have materially affected or are reasonably likely to materially
affect, our internal control over financial reporting.

---

Part IIOther Information

|1. | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|   | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|1. | A Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|   | Not applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|2. | Unregistered Sales of Equity Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Sales of Securities Without Registration Under the
      Securities Act of 1933                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 10%, repayable on demand. The lender has the right to convert all
      or part of the principal sum into units at a conversion rate which is
      calculated at a discount to the average closing market price for ten days
      preceding a loan advance. Each unit consists of one common share of the
      Company and one non-transferable share purchase warrant, expiring 2 years
      from the conversion date, exercisable at the applicable conversion rate.
      On August 31, 2008 the Company entered into agreements to transfer
      previous advances and accrued interest to convertible loans under the
      Convertible Loan Facility Agreement. At March 31, 2009, the Star Leisure
      loan principal was $255,209 and had accrued interest of $28,889. The loan
      principal is convertible into 4,526,436 units at conversion price ranging
      from $0.05 to $0.12 as set at the time the principal was borrowed. Star
      Leisure has not converted any part of the principal sums advanced into
      units as of March 31, 2009. This transaction is with an offshore non-U.S.
      person; accordingly, these securities are exempt from registration
      pursuant to Regulation S.
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|   | On May 5, 2006 the Company entered into a Convertible
      Loan Facility Agreement with CMB Investments Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|   | (CMB), a company controlled by a Director of Strategic,
      whereby the Company would, from time to time, borrow operating funds from
      CMB, at an interest rate of 10%, repayable on demand. The lender has the
      right to convert all or part of the principal sum into units at a
      conversion rate which is calculated at a discount to the average closing
      market price for ten days preceding a loan advance. Each unit consists of
      one common share of the Company and one share purchase warrant, expiring 2
      years from the conversion date, exercisable at the applicable conversion
      rate. At March 31, 2009, the CMB loan principal was $163,766 and had
      accrued interest of $22,281. The loan principal is convertible into
      2,320,858 units. Conversion of this loan and associated warrants to equity
      will be at a price ranging from $0.05 to $0.23. CMB has not converted any
      part of the principal sums advanced into units as of March 31, 2009. This
      transaction is with an offshore non-U.S. person; accordingly, these
      securities are exempt from registration pursuant to Regulation
S.                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On October 11, 2006 the Company completed a private
      placement of 200,000 common shares at $0.40 per share for total proceeds
      of $80,000. In connection with this financing, the Company paid cash of
      $3,000 and issued 100,000 common shares as finders fees. This transaction
      is with an offshore non-U.S. person; accordingly, these securities are
      exempt from registration pursuant to Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|   | On April 23, 2007 the Company completed a private
      placement of 200,000 common shares at $0.25 per share for total proceeds
      of $50,000. This transaction is with an offshore non-U.S. person;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In May 2007 the Company entered into two Consulting
      Agreements for financial consulting services for a period of 12 months.
      Pursuant to these agreements, the Company issued 700,000 common shares at
      a deemed price of $0.20 per share, for a total deemed consideration of
      $140,000. These transactions are with offshore non-U.S. persons;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S, however they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|   | In June 2008 the Company entered into two Consulting
      Agreements for consulting services for a period of 12 months. Pursuant to
      these agreements, the Company issued 750,000 common shares with a market
      price of $0.07 per share, for a total deemed consideration of $52,000.
      These transactions are with offshore non-U.S. persons; accordingly, these
      securities are exempt from registration pursuant to Regulation S, however
      they are restricted under Rule 144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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Purchase of Equity Securities by the
Issuer and Affiliated Purchasers

We did not purchase any of our shares
of common stock or other securities during the period ended March 31, 2009.

|3. | Defaults Upon Senior Securities                          
|-- | ---------------------------------------------------------
|   |                                                          
|   | - None                                                   
|   |                                                          
|4. | Submission of Matters to a Vote of Security
      Holders
|   |                                                          
|   | - None                                                   
|   |                                                          
|5. | Other Information                                        
|   |                                                          
|   | - None                                                   
|   |                                                          
|6. | Exhibits                                                 

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

|      |                    |  | Strategic Internet Investments,
      Incorporated
|----- | ------------------ |  | --------------------------------------------------
|      |                    |  |                                                   
|      |                    |  |                                                   
|      |                    |  |                                                   
|Date: | May
      11, 2009 |  | /s/
      Abbas Salih                             
|      |                    |  | Abbas Salih, CEO, CFO, Director                   

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