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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 June 30, 2009

Commission File No.033-28188

**STRATEGIC INTERNET INVESTMENTS, INCORPORATED**(Registrant name)

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

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months,
and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]     No [   ]

Indicate by check mark whether the registrant is a 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 defined in Rule 12b-2 of the Exchange Act). Yes [X]   
 No [   ]

Common shares outstanding as of June 30, 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.

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1. Financial Statements













STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM FINANCIAL STATEMENTS

June 30, 2009

(Stated in U.S. Dollars)

(Unaudited)

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

|                                                                               |   | June
      30, |   |   | December 31, |  
|------------------------------------------------------------------------------ | - | -------------- | - | - | ------------ | -
|                                                                               |   | 2009           |   |   | 2008         |  
|                                                                               |   |                |   |   |              |  
|ASSETS                                                                         |   |                |   |   |              |  
|                                                                               |   |                |   |   |              |  
|Current                                                                        |   |                |   |   |              |  
|Cash                                                                           | $ | 749            |   | $ | 256          |  
|Prepaid expenses 
      Note 4                                                |   | -              |   |   | 10,000       |  
|                                                                               |   |                |   |   |              |  
|                                                                               |   | 749            |   |   | 10,256       |  
|                                                                               |   |                |   |   |              |  
|Deferred investment costs  Note 2                                             |   | -              |   |   | 1            |  
|                                                                               |   |                |   |   |              |  
|                                                                               | $ | 749            |   | $ | 10,257       |  
|                                                                               |   |                |   |   |              |  
|LIABILITIES                                                                    |   |                |   |   |              |  
|                                                                               |   |                |   |   |              |  
|Current                                                                        |   |                |   |   |              |  
|Accounts payable 
      Note 6                                                | $ | 549,406        |   | $ | 537,716      |  
|Loans payable  Note 3                                                         |   | 563,490        |   |   | 492,839      |  
|                                                                               |   |                |   |   |              |  
|TOTAL LIABILITIES                                                              |   | 1,112,896      |   |   | 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)                                      |   | 27,610         |   |   | 27,610       |  
|Additional paid-in capital                                                     |   | 7,765,583      |   |   | 7,765,583    |  
|Deficit accumulated during the development
      stage                         |   | (9,697,340     | ) |   | (9,605,491   | )
|                                                                               |   |                |   |   |              |  
|                                                                               |   | (1,904,147     | ) |   | (1,812,298   | )
|                                                                               |   |                |   |   |              |  
|                                                                               | $ | 749            |   | $ | 10,257       |  
|                                                                               |   |                |   |   |              |  
|Nature of Operations and Ability to
      Continue as a Going Concern  Note 1 |   |                |   |   |              |  
|Commitments  Notes 3 and 6                                                    |   |                |   |   |              |  

SEE ACCOMPANYING NOTES

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

Cumulative fromFebruary 28,1989 (Date ofThree months ended
      
      
      Six months ended
      
      
      Inception) toJune 30,
      
      
      June 30,
      
      
      June 30,2009
      
      
      2008
      
      
      2009
      
      
      2008
      
      
      2009General and Administrative ExpensesAccounting and audit fees
      $
      29,753
      
      $
      21,274
      
      $
      43,753
      
      $
      27,094
      
      $
      333,070Amortization
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      3,616Communications
      
      331
      
      
      481
      
      
      618
      
      
      1,359
      
      
      105,221Consulting fees 
        Notes 5 and 6
      
      4,000
      
      
      242,558
      
      
      10,000
      
      
      277,558
      
      
      3,419,546Interest  Notes 3 and 6
      
      12,047
      
      
      20,845
      
      
      23,674
      
      
      30,234
      
      
      430,659Investor relations
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      91,385Legal fees
      
      -
      
      
      1,658
      
      
      -
      
      
      1,658
      
      
      166,684Management fees 
        Note 6
      
      -
      
      
      46,125
      
      
      -
      
      
      92,250
      
      
      546,325Office and general  Note 6
      
      651
      
      
      126
      
      
      734
      
      
      213
      
      
      143,058Regulatory fees
      
      5,146
      
      
      1,580
      
      
      5,600
      
      
      1,714
      
      
      34,154Rent  Note 6
      
      -
      
      
      6,000
      
      
      -
      
      
      12,000
      
      
      135,615Transfer agent fees (recovery)
      
      125
      
      
      375
      
      
      565
      
      
      (1,100
      )
      
      43,758Travel
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      110,120Loss on disposal of equipment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,481Write-down of advances torelated party
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      606,337Operating loss
      
      (52,053
      )
      
      (341,022
      )
      
      (84,944
      )
      
      (442,980
      )
      
      (6,171,029
      )Unauthorized distribution
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (69,116
      )Termination fee
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (792,000
      )Gain (loss) on foreign
        exchange
      
      (9,644
      )
      
      (1,184
      )
      
      (6,904
      )
      
      1,488
      
      
      (16,800
      )Gain on settlement of payables
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      25,233Write-down
        of deferred investment costs Note 2
      
      (1
      )
      
      -
      
      
      (1
      )
      
      -
      
      
      (34,210
      )Net loss for the
        period
      $
      (61,698
      )
      $
      (342,206
      )
      $
      (91,849
      )
      $
      (441,492
      )
      $
      (7,057,922
      )Basic and diluted
        loss per share
      $
      (0.00
      )
      $
      (0.01
      )
      $
      (0.00
      )
      $
      (0.02
      )Weighted average number of commonshares outstanding
      
      27,610,326
      
      
      27,107,579
      
      
      27,610,326
      
      
      26,983,952


SEE ACCOMPANYING NOTES

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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 |  
|                                                            |   | Six months ended June 30, |   |   | June 30, |  
|                                                            |   | 2009                      |   |   | 2008     |   |   | 2009                   |  
|Operating Activities                                        |   |                           |   |   |          |   |   |                        |  
|Net loss for the period                                     | $ | (91,849                   | ) | $ | (441,492 | ) | $ | (7,057,922             | )
|Adjustments to reconcile net loss to net cash
      used in |   |                           |   |   |          |   |   |                        |  
|operating activities:                                       |   |                           |   |   |          |   |   |                        |  
|Amortization                                                |   | -                         |   |   | -        |   |   | 3,616                  |  
|Beneficial
      conversion feature on convertible debt     |   | -                         |   |   | 11,161   |   |   | 239,662                |  
|Communications                                              |   | -                         |   |   | -        |   |   | 28,000                 |  
|Consulting
      fees                                       |   | 10,000                    |   |   | 62,430   |   |   | 2,478,554              |  
|Gain on settlement
      of payables                        |   | -                         |   |   | -        |   |   | (25,233                | )
|Net
      interest accrued on loans                         |   | 23,674                    |   |   | 6,072    |   |   | 67,319                 |  
|Legal fees                                                  |   | -                         |   |   | -        |   |   | 25,000                 |  
|Loss
      on disposal of equipment                         |   | -                         |   |   | -        |   |   | 1,481                  |  
|Management
      fees                                       |   | -                         |   |   | -        |   |   | 7,000                  |  
|Stock-based
      compensation                              |   | -                         |   |   | 215,128  |   |   | 736,053                |  
|Termination
      fees                                      |   | -                         |   |   | -        |   |   | 792,000                |  
|Write-down
      of deferred investment costs               |   | 1                         |   |   | -        |   |   | 34,210                 |  
|Write-down
      of advances to related party               |   | -                         |   |   | -        |   |   | 606,337                |  
|Changes in non-cash
      item:                             |   |                           |   |   |          |   |   |                        |  
|Accounts payable                                            |   | 11,690                    |   |   | 100,718  |   |   | 687,351                |  
|                                                            |   |                           |   |   |          |   |   |                        |  
|Net cash used in operating
      activities                 |   | (46,484                   | ) |   | (45,983  | ) |   | (1,376,572             | )
|                                                            |   |                           |   |   |          |   |   |                        |  
|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                                               |   | 46,977                    |   |   | 47,183   |   |   | 849,636                |  
|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                   |   | 46,977                    |   |   | 47,183   |   |   | 2,022,965              |  
|                                                            |   |                           |   |   |          |   |   |                        |  
|Increase in cash during the period                          |   | 493                       |   |   | 1,200    |   |   | 749                    |  
|Cash, beginning of
      the period                         |   | 256                       |   |   | 65       |   |   | -                      |  
|                                                            |   |                           |   |   |          |   |   |                        |  
|Cash, end of the
      period                               | $ | 749                       |   | $ | 1,265    |   | $ | 749                    |  
|                                                            |   |                           |   |   |          |   |   |                        |  
|Supplementary disclosure of cash flows:                     |   |                           |   |   |          |   |   |                        |  
|Cash paid for Interest                                      | $ | -                         |   | $ | -        |   | $ | 93,859                 |  
|                                                            |   |                           |   |   |          |   |   |                        |  
|Non-cash Transactions  Note 5                              |   |                           |   |   |          |   |   |                        |  

SEE ACCOMPANYING NOTES

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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 June 30, 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
June 30, 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
June 30, 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
June 30, 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                                      |            | -            |   |        | -         |   |           | -           |   |            | (91,849     | ) |            | (91,849    | )
|                                                    |            |              |   |        |           |   |           |             |   |            |             |   |            |            |  
|Balance, June 30,
      2009                        | 27,610,326 |              | $ | 27,610 |           | $ | 7,765,583 |             | $ | (9,697,340 | )           | $ | (1,904,147 | )         

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A
Development Stage Company) NOTES TO THE INTERIM FINANCIAL STATEMENTS
June 30, 2009 (Stated in U.S. Dollars) (Unaudited)

|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 June 30, 2009, the Company had not yet achieved profitable
      operations, has an accumulated deficit of $9,697,340 since its inception,
      has a working capital deficiency of $1,112,147 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 totalling $1,112,896. 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 six months ended June
      30, 2009 are not indicative of the results that may be expected for the
      full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Deferred Investment Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Deferred investment costs consist of consultants fees
      and payments to reimburse Star Leisure and Entertainment Inc. (Star
      Leisure) with respect to the acquisition of Gulf Star World Development
      W.L.L (Gulf Star). By a letter of agreement dated July 11, 2002, the
      Company agreed to purchase 80% of the outstanding shares of Gulf Star, a
      Bahrain corporation, from Star Leisure. Star Leisure is controlled by a
      director of the Company. Gulf Star is the 100% owner and developer of the
      residential and tourist project known as the Dream Island Resort, located
      in Bahrain. In 2005, due to the uncertainty of the future viability of the
      Dream Island project, the Company wrote-down the associated deferred
      investment costs to a nominal value of $1.00. On May 20, 2009 the letter
      of agreement was terminated and the remaining related investment costs
      written-off.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

1

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company) 
  NOTES TO THE INTERIM FINANCIAL STATEMENTS 
  June 30, 2009 
  (Stated in U.S. Dollars) 
  (Unaudited)

|3. | Loans Payable
|-- | -------------

| |    |                                                                                    |   | June 30, |  |   | December 31, | 
| | -- | ---------------------------------------------------------------------------------- | - | -------- |  | - | ------------ | 
| |    |                                                                                    |   | 2009     |  |   | 2008         | 
| |    |                                                                                    |   |          |  |   |              | 
| | a) | Loan payable to a company
      controlled by a director of the Company            | $ | 11,230   |  | $ | 10,591       | 
| |    | including accrued interest of $4,428 (December
      31, 2008 - $3,789). The       |   |          |  |   |              | 
| |    | loan is unsecured, bearing
      interest at 12% per annum and is repayable on     |   |          |  |   |              | 
| |    | demand.                                                                            |   |          |  |   |              | 
| |    |                                                                                    |   |          |  |   |              | 
| | b) | Loans payable to companies controlled by
      directors of the Company. The       |   | 70,394   |  |   | 23,417       | 
| |    | loans are unsecured,
      non-interest bearing, and repayable upon demand.        |   |          |  |   |              | 
| |    |                                                                                    |   |          |  |   |              | 
| | c) | Loan payable to a company
      controlled by a director of the Company,           |   | 190,686  |  |   | 181,570      | 
| |    | including accrued interest payable of $26,920
      (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 June 30, 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.                                                                        |   |          |  |   |              | 
| |    |                                                                                    |   |          |  |   |              | 
| | d) | Loan payable to a company controlled by a
      director of the Company,           |   | 291,180  |  |   | 277,261      | 
| |    | including accrued interest of
      $35,971 (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 June 30, 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.                                                        |   |          |  |   |              | 
| |    |                                                                                    |   |          |  |   |              | 
| |    |                                                                                    | $ | 563,490  |  | $ | 492,839      | 

2

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company) 
  NOTES TO THE INTERIM FINANCIAL STATEMENTS 
  June 30, 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 June 30, 2009, $Nil (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.                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | During the current period the Company did not grant any
      stock options to consultants, while during the period ended June 30, 2008
      the Company granted stock options to consultants with a fair value of
      $215,128.                                                                                                                                                                                                                                                                                                                                                   

3

---

STRATEGIC INTERNET INVESTMENTS, INCORPORA

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company) 
  NOTES TO THE INTERIM FINANCIAL STATEMENTS 
  June 30, 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 June 30, 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 June 30, 2009                        |  | 4,125,000  |   |  | $0.15    |  |  | 3.96 years       |  | $ | -         | 

At June 30, 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 June 30, 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 
  June 30, 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
    
    
      
    
    
    WeightedPreferred
    
    
      Number of
    
    
    Average PriceYear
      
    
    Shares
    
    
      Common Shares
    
    
    Per
      Share
    
    
    Total1995
      Consulting fee
    
    -
    
    
      50,000
    
    
    $0.03
    
    $
    1,5001998
      Management fee
    
    -
    
    
      7,000,000
    
    
    $0.001
    
    
    7,0001998
      Consulting fee
    
    -
    
    
      620,000
    
    
    $0.01
    
    
    6,2002000
      Finders fee
    
    -
    
    
      50,000
    
    
    $0.001
    
    
    502001
      Consulting fee
    
    -
    
    
      708,406
    
    
    $2.07
    
    
    1,468,2542002
      Deferred investment cost
    
    -
    
    
      1,300,000
    
    
    $0.05
    
    
    65,0002002
      Consulting fee
    
    -
    
    
      684,143
    
    
    $0.19
    
    
    131,4002002
      Debt settlement
    
    -
    
    
      680,886
    
    
    $0.20
    
    
    138,0062003
      Consulting fee
    
    -
    
    
      1,450,000
    
    
    $0.14
    
    
    203,0002003
      Termination fee
    
    198,000
    
    
      -
    
    
    $4.00
    
    
    792,0002004
      Loan conversion
    
    -
    
    
      825,364
    
    
    $0.06
    
    
    48,5372004
      Loan settlement
    
    -
    
    
      613,000
    
    
    $0.07
    
    
    45,0002004
      Consulting fee
    
    -
    
    
      360,000
    
    
    $0.40
    
    
    142,5002004
      Deferred investment cost (cancellation)
    
    -
    
    
      (1,300,000
    )
    
    $0.05
    
    
    (65,000
    )2005
      Communications
    
    -
    
    
      56,000
    
    
    $0.50
    
    
    28,0002005
      Consulting fees
    
    -
    
    
      1,135,000
    
    
    $0.29
    
    
    333,7002005
      Legal fees
    
    -
    
    
      50,000
    
    
    $0.50
    
    
    25,0002005
      Loan conversion
    
    -
    
    
      635,901
    
    
    $0.39
    
    
    250,1602005
      Stock dividend
    
    -
    
    
      4,120,643
    
    
    $0.65
    
    
    2,678,4182006
      Finders fee
    
    -
    
    
      100,000
    
    
    $0.40
    
    
    40,0002007
      Consulting fees
    
    -
    
    
      700,000
    
    
    $0.20
    
    
    140,0002008
      Consulting fees
    
    -
    
    
      750,000
    
    
    $0.07
    
    
    52,000198,000
    
    
      20,589,343
    
    
    
    
    $
    6,530,725


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

5

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A Development Stage Company) 
  NOTES TO THE INTERIM FINANCIAL STATEMENTS 
  June 30, 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 fromFebruary 28, 19889Three months ended
      
      
      Six months ended
      
      
      (Date of Inception) toJune 30,
      
      
      June 30,
      
      
      June 30, 20082009
      
      
      2008
      
      
      2009
      
      
      2008
      
      
      2009Consulting fees
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      249,043Interest
      
      12,047
      
      
      20,845
      
      
      23,674
      
      
      30,234
      
      
      282,894Management fees
      
      -
      
      
      46,125
      
      
      -
      
      
      92,250
      
      
      546,325Office and general
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      26,944Rent
      
      -
      
      
      6,000
      
      
      -
      
      
      12,000
      
      
      130,232$
      12,047
      
      $
      72,970
      
      $
      23,674
      
      $
      134,484
      
      $
      1,235,438


At June 30, 2009, accounts payable
includes $447,042 (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 June 30, 2009, accounts payable also
includes $15,527 (December 31, 2008 - $15,527) of expenses for operating costs
paid on behalf of the Company by a company 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.

6

---

|2. | Managements Discussion and Analysis 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. Both these projects were terminated during April and May 2009. The Company will continue to explore new
investment opportunities.                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 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 had 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.                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In May 2009, the Company and Star Leisure mutually agreed to terminate the agreement to purchase the Gulf Star shares, and the remaining balance of this investment was written-off.                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Port Residence Project                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In January 7, 2008, 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.                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In April 2009, the Company unilaterally withdrew from the Letter of Intent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Plan of Operation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company had been devoting its business efforts to real estate development projects located in Bahrain and Turkey. During April and May 2009, the Company terminated its involvement in these projects. The Company plans 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
    $
    60,000Consulting and management fees
    
    10,000Interest
    
    20,000General and administrative expenses
    
    3,000Regulatory 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 $1,112,896. 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 June 30, 2009,
the Company incurred general and administrative expenses totaling $52,053
compared to $341,022 during the same period of the previous year.

The changes in our general and
administrative expenses for the six month period ended June 30, 2009 when
compared to the six month period ended June 30, 2008 was primarily due to:

| | a) | The increase in accounting, audit, and legal fees 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) | Consulting fees expense includes the fair value of stock
      options granted to consultants as part of their remuneration. During the
      current period the Company did not grant any stock options to consultants,
      while during the period ended June 30, 2008 the Company granted stock
      options to consultants with a fair value of $215,128. In addition, the
      June 30, 2008 consulting fees expense included the issuance of shares for
      consulting services, while no new consulting agreements were entered into
      during the current period.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | c) | Management fees declined by $92,250 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) | Interest on loans increased by $4,600, this s attributed
      to the principal balance on its loans increasing compared to the
      comparative 2008 period. During the comparative 2008 period the Company
      recognized $11,160 as the intrinsic value of the beneficial conversion
      feature of convertible loans and this amount was included in interest
      expense. There were no beneficial conversion feature charges during the
      2009 period, resulting in a net decrease in interest expense of
    $6,560.                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | e) | Regulatory and transfer agent fees increased by $5,551.
      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. And as of September 2008, the Company is
      now required to make public disclosure filings with Canadian regulators,
      as well as filing in the USA. This has increased the regulatory fees
      expense.                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 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 June 30, 2009, the Company had
total current assets of $749 and total liabilities of $1,112,896. As of June 30,
2009, the Company had cash of $749 and a working capital deficiency of
$1,112,147 as of June 30, 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 $1,112,896.
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 six month period ended June 30, 2009 was $46,484 as compared to cash used by
operating activities for the same period in 2008 of $45,983. The cash used in
operating activities is consistent with the same period in the previous year.

The Company has the following loans
outstanding as of June 30, 2009:

A $11,230 loan payable to a company
controlled by a director of the Company including accrued interest of $4,428
(December 31, 2008 - $3,789). The loan is unsecured, bearing interest at 12% per
annum and is repayable on demand.

$70,394 in loans payable to companies
controlled by directors of the Company are unsecured, non-interest bearing, and
repayable upon demand.

A $190,686 loan payable to a company
controlled by a director of the Company, including accrued interest payable of
$26,920 (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 six month period ended June 30,
2009 an amount of $Nil (2008 - $11,161) 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 $291,180 loan payable to a company
controlled by a director of the Company, including accrued interest of $35,971
(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 June 30, 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.

Going Concern

The unaudited 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 June 30, 2009, we had cash of $749 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 $1,112,896.
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 June 30, 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 June 30, 2009, we had cash of $749 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 $1,112,896. 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 June 30, 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 June 30,
2009 that have materially affected or are reasonably likely to materially
affect, our internal control over financial reporting.

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Part II  Other Information

|1.  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|1.A | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Not applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|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 June
      30, 2009, the Star Leisure loan principal was $255,209. 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
      June 30, 2009. This transaction is with an offshore non-U.S. person;
      accordingly, these securities are exempt from registration pursuant to
      Regulation S.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | On May 5, 2006 the Company entered into a Convertible
      Loan Facility Agreement with CMB Investments Ltd. (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 June 30, 2009, the CMB
      loan principal was $163,766. 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 June 30, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | 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 June 30, 2009.
|   |                                                                                                                       
|3. | Defaults Upon Senior Securities                                                                                       
|   |                                                                                                                       
|   |                                                                                                                       
|   |                                                                                                                       
|4. | Submission of Matters to a Vote of Security
      Holders                                                             
|   |                                                                                                                       
|   |                                                                                                                       
|   |                                                                                                                       
|5. | Other Information                                                                                                     
|   |                                                                                                                       
|   |                                                                                                                       
|   |                                                                                                                       
|6. | Exhibits                                                                                                              

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


| | Note 1: | Incorporated by reference to Form 10-KSB Annual Report
      for the year ending December 31, 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: | August 12, 2009 |  | /s/ Abbas Salih                                   
|      |                 |  | Abbas Salih, CEO, CFO, Director                   

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