---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended March 31, 2008

Commission File No. 033-28188

STRATEGIC INTERNET INVESTMENTS,
INCORPORATED(Registrant name)

|Delaware                                  | 84-1116458                   
|----------------------------------------- | -----------------------------
|(State of incorporation)                  | (IRS Employer Identification)
|                                          |                              
|                                          |                              
|Suite 250, 1090 West Georgia Street       |                              
|Vancouver, BC                             |                              
|Canada V6E 3V7                            | 604-684-8662                 
|(Address of  principal executive offices) | (Issuer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 April 30, 2008: **26,860,326**

PART I  FINANCIAL INFORMATION

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

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

---

1. Financial Statements













STRATEGIC INTERNET INVESTMENTS, INCORPORATED

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Stated in U.S. Dollars)



(Unaudited)

---

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

|                                                            |   | March
      31, |   |   | December 31, |  
|----------------------------------------------------------- | - | --------------- | - | - | ------------ | -
|                                                            |   | 2008            |   |   | 2007         |  
|                                                            |   |                 |   |   |              |  
|ASSETS                                                      |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Cash                                                        | $ | 17,163          |   | $ | 65           |  
|Prepaid expenses  Note 4                                   |   | 20,400          |   |   | 55,400       |  
|                                                            |   |                 |   |   |              |  
|                                                            |   | 37,563          |   |   | 55,465       |  
|                                                            |   |                 |   |   |              |  
|Deferred investment costs  Notes 2 and 4                   |   | 1               |   |   | 1            |  
|                                                            |   |                 |   |   |              |  
|                                                            | $ | 37,564          |   | $ | 55,466       |  
|                                                            |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|LIABILITIES                                                 |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Current                                                     |   |                 |   |   |              |  
|Accounts payable  Note
      6                             | $ | 410,221         |   | $ | 383,551      |  
|Loans payable  Note 3                                      |   | 422,509         |   |   | 393,742      |  
|                                                            |   |                 |   |   |              |  
|                                                            |   | 832,730         |   |   | 777,293      |  
|                                                            |   |                 |   |   |              |  
|STOCKHOLDERS DEFICIENCY                                    |   |                 |   |   |              |  
|                                                            |   |                 |   |   |              |  
|Capital Stock  Notes 3, 4, and 6                           |   |                 |   |   |              |  
|Class A Convertible
      Preferred stock, $0.001 par value |   |                 |   |   |              |  
|10,000,000
      authorized, 198,000 outstanding            |   | 198             |   |   | 198          |  
|Class B Preferred
      stock, $0.001 par value             |   |                 |   |   |              |  
|10,000,000
      authorized, none outstanding               |   |                 |   |   |              |  
|Common stock, $0.001
      par value                        |   |                 |   |   |              |  
|100,000,000
      authorized                                |   |                 |   |   |              |  
|26,860,326 outstanding (2007: 26,860,326 outstanding)       |   | 26,860          |   |   | 26,860       |  
|Additional paid-in capital                                  |   | 8,132,795       |   |   | 8,132,795    |  
|Deficit accumulated during the development stage            |   | (8,955,019      | ) |   | (8,881,680   | )
|                                                            |   |                 |   |   |              |  
|                                                            |   | (795,166        | ) |   | (721,827     | )
|                                                            |   |                 |   |   |              |  
|                                                            | $ | 37,564          |   | $ | 55,466       |  

SEE ACCOMPANYING NOTES

---

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

|                                                     |   |                    |   |   |               |   |   | Cumulative from |  
|---------------------------------------------------- | - | ------------------ | - | - | ------------- | - | - | --------------- | -
|                                                     |   |                    |   |   |               |   |   | February 28,    |  
|                                                     |   |                    |   |   |               |   |   | 1989 (Date of   |  
|                                                     |   | Three months ended |   |   | Inception) to |  
|                                                     |   | March
      31,    |   |   | March 31,     |  
|                                                     |   | 2008               |   |   | 2007          |   |   | 2008            |  
|                                                     |   |                    |   |   |               |   |   |                 |  
|General and Administrative Expenses                  |   |                    |   |   |               |   |   |                 |  
|Accounting and audit fees                            | $ | 5,820              |   | $ | 13,621        |   | $ | 248,668         |  
|Amortization                                         |   | -                  |   |   | -             |   |   | 3,616           |  
|Communications                                       |   | 878                |   |   | 408           |   |   | 103,330         |  
|Consulting fees  Note 6                             |   | 35,000             |   |   | 24,441        |   |   | 2,611,093       |  
|Interest  Notes 3
      and 6                       |   | 9,388              |   |   | 7,301         |   |   | 252,746         |  
|Investor relations                                   |   | -                  |   |   | -             |   |   | 91,385          |  
|Legal fees                                           |   | -                  |   |   | -             |   |   | 160,089         |  
|Management fees  Note 6                             |   | 46,125             |   |   | 46,350        |   |   | 435,512         |  
|Office and general 
      Note 6                    |   | 87                 |   |   | 432           |   |   | 141,519         |  
|Regulatory fees                                      |   | 134                |   |   | 1,031         |   |   | 25,437          |  
|Rent  Note 6                                        |   | 6,000              |   |   | 5,280         |   |   | 123,855         |  
|Transfer agent fees (recovery)                       |   | (1,475             | ) |   | 620           |   |   | 41,918          |  
|Travel                                               |   | -                  |   |   | -             |   |   | 110,031         |  
|Loss on disposal of equipment                        |   | -                  |   |   | -             |   |   | 1,481           |  
|Non-cash compensation charges
       Note 4         |   | -                  |   |   | 20,436        |   |   | 484,975         |  
|Write-down of advances to                            |   |                    |   |   |               |   |   |                 |  
|related party                                        |   | -                  |   |   | -             |   |   | 606,337         |  
|                                                     |   |                    |   |   |               |   |   |                 |  
|Operating loss                                       |   | (101,957           | ) |   | (119,920      | ) |   | (5,441,992      | )
|                                                     |   |                    |   |   |               |   |   |                 |  
|Unauthorized distribution                            |   | -                  |   |   | -             |   |   | (69,116         | )
|Termination fee                                      |   | -                  |   |   | -             |   |   | (792,000        | )
|Gain (loss) on foreign
      exchange                |   | 2,672              |   |   | (955          | ) |   | (29,463         | )
|Gain on write-down of debt                           |   | 25,946             |   |   | -             |   |   | 51,179          |  
|Write-down of deferred
      investment              |   |                    |   |   |               |   |   |                 |  
|costs  Note 4                                       |   | -                  |   |   | -             |   |   | (34,209         | )
|                                                     |   |                    |   |   |               |   |   |                 |  
|                                                     |   |                    |   |   |               |   |   |                 |  
|Net loss and comprehensive loss for the period       | $ | (73,339            | ) | $ | (120,875      | ) | $ | (6,315,601      | )
|                                                     |   |                    |   |   |               |   |   |                 |  
|Basic and diluted loss per share                     | $ | (0.00              | ) | $ | (0.00         | ) |   |                 |  
|                                                     |   |                    |   |   |               |   |   |                 |  
|Weighted average number of common shares outstanding |   | 26,860,326         |   |   | 25,960,326    |   |   |                 |  

SEE ACCOMPANYING NOTES

---

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

|                                                            |   |                    |   |   |                         |   |   | Cumulative from   |  
|----------------------------------------------------------- | - | ------------------ | - | - | ----------------------- | - | - | ----------------- | -
|                                                            |   |                    |   |   |                         |   |   | February 28, 1989 |  
|                                                            |   | Three months ended |   |   | (Date of  Inception) to |  
|                                                            |   | March 31,          |   |   | March 31,               |  
|                                                            |   | 2008               |   |   | 2007                    |   |   | 2008              |  
|Operating Activities                                        |   |                    |   |   |                         |   |   |                   |  
|Net loss for the period                                     | $ | (73,339            | ) | $ | (120,875                | ) | $ | (6,315,601        | )
|Adjustments to reconcile net loss to net cash
      used in |   |                    |   |   |                         |   |   |                   |  
|operating activities:                                       |   |                    |   |   |                         |   |   |                   |  
|Amortization                                                |   | -                  |   |   | -                       |   |   | 3,616             |  
|Beneficial
      conversion feature on convertible debt     |   | -                  |   |   | -                       |   |   | 117,400           |  
|Communications                                              |   | -                  |   |   | -                       |   |   | 28,000            |  
|Consulting
      fees                                       |   | 35,000             |   |   | -                       |   |   | 2,406,154         |  
|Gain on write-down
      of debt                            |   | (25,946            | ) |   | -                       |   |   | (51,179           | )
|Interest
      accrued on loans                             |   | 9,388              |   |   | 7,301                   |   |   | 88,475            |  
|Legal fees                                                  |   | -                  |   |   | -                       |   |   | 25,000            |  
|Loss
      on disposal of equipment                         |   | -                  |   |   | -                       |   |   | 1,481             |  
|Management
      fees                                       |   | -                  |   |   | -                       |   |   | 7,000             |  
|Non-cash
      compensation charge                          |   | -                  |   |   | 20,436                  |   |   | 484,975           |  
|Termination
      fees                                      |   | -                  |   |   | -                       |   |   | 792,000           |  
|Write-down
      of deferred investment costs               |   | -                  |   |   | -                       |   |   | 606,337           |  
|Write-down
      of advances to related party               |   | -                  |   |   | -                       |   |   | 34,209            |  
|Changes in non-cash items:                                  |   |                    |   |   |                         |   |   |                   |  
|Prepaid expenses                                            |   | -                  |   |   | (880                    | ) |   | -                 |  
|Accounts
      payable                                      |   | 52,616             |   |   | 83,667                  |   |   | 574,111           |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Net cash used in operating activities                       |   | (2,281             | ) |   | (10,351                 | ) |   | (1,198,022        | )
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Investing Activities                                        |   |                    |   |   |                         |   |   |                   |  
|Organization costs                                          |   | -                  |   |   | -                       |   |   | -                 |  
|Acquisition of capital assets                               |   | -                  |   |   | -                       |   |   | -                 |  
|Deferred investment costs                                   |   | -                  |   |   | -                       |   |   | -                 |  
|Advances to related party                                   |   | -                  |   |   | -                       |   |   | -                 |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Net cash used in investing activities                       |   | -                  |   |   | -                       |   |   | -                 |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Financing Activities                                        |   |                    |   |   |                         |   |   |                   |  
|Loans payable                                               |   | 19,379             |   |   | 5,413                   |   |   | 687,500           |  
|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             |   | 19,379             |   |   | 5,413                   |   |   | 1,860,829         |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Increase (decrease) in cash during the period               |   | 17,098             |   |   | (4,938                  | ) |   | 17,163            |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Cash, beginning of
      the period                         |   | 65                 |   |   | 10,822                  |   |   | -                 |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Cash, end of the
      period                               | $ | 17,163             |   | $ | 5,884                   |   | $ | 17,163            |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Supplementary disclosure of cash flows:                     |   |                    |   |   |                         |   |   |                   |  
|Cash paid for Interest                                      | $ | -                  |   | $ | -                       |   | $ | 17,054            |  
|                                                            |   |                    |   |   |                         |   |   |                   |  
|Non-cash Transactions  Note 5                              |   |                    |   |   |                         |   |   |                   |  

SEE ACCOMPANYING NOTES

---

STRATEGICINTERNETINVESTMENTS,INCORPORATED(A Development
Stage Company) INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY
For the period from February 28, 1989 (Date of Inception) to March 31, 2008
(Stated in U.S. Dollars) (Unaudited )

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

Contd

SEE ACCOMPANYING NOTES

---

**STRATEGIC INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) INTERIM CONSOLIDATED STATEMENTS
OF STOCKHOLDERS DEFICIENCY For the period from February 28, 1989 (Date of
Inception) to March 31, 2008 (Stated in U.S. Dollars) (Unaudited )

|                                          |                 |  |              |           |  |           |  |  |             |  |  |            |   |  | Deficit     |   |  |          |  
|----------------------------------------- | --------------- |  | ------------ | --------- |  | --------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | -------- | -
|                                          |                 |  |              |           |  |           |  |  |             |  |  |            |   |  | Accumulated |   |  |          |  
|                                          |                 |  |              |           |  |           |  |  |             |  |  | Additional |   |  | During the  |   |  |          |  
|                                          | Preferred Stock |  | Common Stock |           |  | Paid-In   |  |  | Development |  |  |            |  
|                                          | Shares          |  |              | Par Value |  | Shares    |  |  | Par Value   |  |  | Capital    |   |  | Stage       |   |  | Total    |  
|                                          |                 |  |              |           |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1995                | -               |  |              | -         |  | 116,695   |  |  | 116         |  |  | 108,956    |   |  | (110,500    | ) |  | (1,428   | )
|Net loss                                  | -               |  |              | -         |  | -         |  |  | -           |  |  | -          |   |  | (9,068      | ) |  | (9,068   | )
|                                          |                 |  |              |           |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance December 31, 1996                 | -               |  |              | -         |  | 116,695   |  |  | 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  | )
|                                          |                 |  |              |           |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 1999                | -               |  |              | -         |  | 9,736,695 |  |  | 9,736       |  |  | 134,436    |   |  | (230,132    | ) |  | (85,960  | )
|Issuance of stock for cash                |                 |  |              |           |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
|pursuant to a private placement           |                 |  |              |           |  |           |  |  |             |  |  |            |   |  |             |   |  |          |  
| at $0.30                                | -               |  |              | -         |  | 1,133,334 |  |  | 1,133       |  |  | 338,867    |   |  | -           |   |  | 340,000  |  
|Issue of stock for finders fee            | -               |  |              | -         |  | 50,000    |  |  | 50          |  |  | (50        | ) |  | -           |   |  | -        |  
|Net loss                                  | -               |  |              | -         |  | -         |  |  | -           |  |  | -          |   |  | (336,431    | ) |  | (336,431 | )
|Non-cash compensation charge              | -               |  |              | -         |  | -         |  |  | -           |  |  | 78,707     |   |  | -           |   |  | 78,707   |  

Contd

SEE ACCOMPANYING NOTES

---

**STRATEGIC INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) INTERIM CONSOLIDATED STATEMENTS
OF STOCKHOLDERS DEFICIENCY For the period from February 28, 1989 (Date of
Inception) to March 31, 2008 (Stated in U.S. Dollars) (Unaudited )

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

Contd

SEE ACCOMPANYING NOTES

---

**STRATEGIC INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) INTERIM CONSOLIDATED STATEMENTS
OF STOCKHOLDERS DEFICIENCY For the period from February 28, 1989 (Date of
Inception) to March 31, 2008 (Stated in U.S. Dollars) (Unaudited )

|                                                              |                 |  |              |           |  |            |   |  |             |   |  |            |   |  | Deficit     |   |  |            |  
|------------------------------------------------------------- | --------------- |  | ------------ | --------- |  | ---------- | - |  | ----------- | - |  | ---------- | - |  | ----------- | - |  | ---------- | -
|                                                              |                 |  |              |           |  |            |   |  |             |   |  |            |   |  | Accumulated |   |  |            |  
|                                                              |                 |  |              |           |  |            |   |  |             |   |  | Additional |   |  | During the  |   |  |            |  
|                                                              | Preferred Stock |  | Common Stock |           |  | Paid-In    |   |  | Development |   |  |            |  
|                                                              | Shares          |  |              | Par Value |  | Shares     |   |  | Par Value   |   |  | Capital    |   |  | Stage       |   |  | Total      |  
|                                                              |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
|Balance, December 31, 2002                                    | -               |  |              | -         |  | 15,205,596 |   |  | 15,204      |   |  | 2,791,455  |   |  | (3,077,727  | ) |  | (271,068   | )
|Non-cash compensation charge                                  | -               |  |              | -         |  | -          |   |  | -           |   |  | 53,500     |   |  | -           |   |  | 53,500     |  
|Issue of stock for services              
        at $0.14   | -               |  |              | -         |  | 1,450,000  |   |  | 1,450       |   |  | 201,550    |   |  | -           |   |  | 203,000    |  
|Issue of stock for cash pursuant to a private
      placement |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
| at $0.10                                                    | -               |  |              | -         |  | 650,000    |   |  | 650         |   |  | 64,350     |   |  | -           |   |  | 65,000     |  
|Net loss                                                      | -               |  |              | -         |  | -          |   |  | -           |   |  | -          |   |  | (1,208,941  | ) |  | (1,208,941 | )
|Issued for termination fee                  -
      at $4.00  | 198,000         |  |              | 198       |  | -          |   |  | -           |   |  | 791,802    |   |  | -           |   |  | 792,000    |  
|                                                              |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
|Balance, December 31, 2003                                    | 198,000         |  |              | 198       |  | 17,305,596 |   |  | 17,304      |   |  | 3,902,657  |   |  | (4,286,668  | ) |  | (366,509   | )
|Non-cash compensation charge                                  | -               |  |              | -         |  | -          |   |  | -           |   |  | 161,450    |   |  | -           |   |  | 161,450    |  
|Issue of stock for cash pursuant
      to the exercise of     |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
|share purchase warrants                   
       at $0.10   | -               |  |              | -         |  | 320,000    |   |  | 320         |   |  | 31,680     |   |  | -           |   |  | 32,000     |  
| at $0.05                                                    | -               |  |              | -         |  | 643,715    |   |  | 644         |   |  | 31,542     |   |  | -           |   |  | 32,186     |  
|Issue of stock for cash pursuant to the exercise
      of     |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
|share purchase
      options                
       at $0.25 | -               |  |              | -         |  | 205,000    |   |  | 205         |   |  | 51,045     |   |  | -           |   |  | 51,250     |  
|Issue of stock for debt                    
       at $0.05  | -               |  |              | -         |  | 563,000    |   |  | 563         |   |  | 29,437     |   |  | -           |   |  | 30,000     |  
| at $0.06                                                    | -               |  |              | -         |  | 825,364    |   |  | 825         |   |  | 47,712     |   |  | -           |   |  | 48,537     |  
| at $0.30                                                    | -               |  |              | -         |  | 50,000     |   |  | 50          |   |  | 14,950     |   |  | -           |   |  | 15,000     |  
|Issuance of stock for services           
      at $2.00     | -               |  |              | -         |  | 10,000     |   |  | 10          |   |  | 19,990     |   |  | -           |   |  | 20,000     |  
| at $0.35                                                    | -               |  |              | -         |  | 350,000    |   |  | 350         |   |  | 122,150    |   |  | -           |   |  | 122,500    |  
|Cancellation of stock issued for deferred                     |                 |  |              |           |  |            |   |  |             |   |  |            |   |  |             |   |  |            |  
|Investment costs                            
       at $0.05 |                 |  |              |           |  | (1,300,000 | ) |  | (1,300      | ) |  | (63,700    | ) |  | -           |   |  | (65,000    | )
|Net loss                                                      | -               |  |              | -         |  | -          |   |  | -           |   |  | -          |   |  | (517,324    | ) |  | (517,324   | )

Contd

SEE ACCOMPANYING NOTES

---

**STRATEGIC INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) INTERIM CONSOLIDATED STATEMENTS
OF STOCKHOLDERS DEFICIENCY For the period from February 28, 1989 (Date of
Inception) to March 31, 2008 (Stated in U.S. Dollars) (Unaudited )

|                                                                 |                 |  |              |           |  |            |  |  |             |  |  |            |   |  | Deficit     |   |  |          |  
|---------------------------------------------------------------- | --------------- |  | ------------ | --------- |  | ---------- |  |  | ----------- |  |  | ---------- | - |  | ----------- | - |  | -------- | -
|                                                                 |                 |  |              |           |  |            |  |  |             |  |  |            |   |  | Accumulated |   |  |          |  
|                                                                 |                 |  |              |           |  |            |  |  |             |  |  | Additional |   |  | During the  |   |  |          |  
|                                                                 | Preferred Stock |  | Common Stock |           |  | Paid-In    |  |  | Development |  |  |            |  
|                                                                 | Shares          |  |              | Par Value |  | Shares     |  |  | Par Value   |  |  | Capital    |   |  | Stage       |   |  | Total    |  
|                                                                 |                 |  |              |           |  |            |  |  |             |  |  |            |   |  |             |   |  |          |  
|Balance, December 31, 2004                                       | 198,000         |  |              | 198       |  | 18,972,675 |  |  | 18,971      |  |  | 4,348,913  |   |  | (4,803,992  | ) |  | (435,910 | )
|Non-cash compensation charge                                     | -               |  |              | -         |  | -          |  |  | -           |  |  | 25,700     |   |  | -           |   |  | 25,700   |  
|Issue of stock for cash pursuant
      to the exercise of        |                 |  |              |           |  |            |  |  |             |  |  |            |   |  |             |   |  |          |  
|share purchase warrants          
            at $0.07          | -               |  |              | -         |  | 75,820     |  |  | 76          |  |  | 5,232      |   |  | -           |   |  | 5,308    |  
| at $0.10                                                       | -               |  |              | -         |  | 357,760    |  |  | 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                                       | 198,000         |  |              | 198       |  | 25,660,326 |  |  | 25,660      |  |  | 7,720,355  |   |  | (7,960,680  | ) |  | (214,467 | )
|                                                                 |                 |  |              |           |  |            |  |  |             |  |  |            |   |  |             |   |  |          |  
|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 CONSOLIDATED STATEMENTS
OF STOCKHOLDERS DEFICIENCY For the period from February 28, 1989 (Date of
Inception) to March 31, 2008 (Stated in U.S. Dollars) (Unaudited )

|                                                              |                 |  |              |           |  |            |  |   |             |  |   |            |  |   | Deficit     |   |   |          |  
|------------------------------------------------------------- | --------------- |  | ------------ | --------- |  | ---------- |  | - | ----------- |  | - | ---------- |  | - | ----------- | - | - | -------- | -
|                                                              |                 |  |              |           |  |            |  |   |             |  |   |            |  |   | Accumulated |   |   |          |  
|                                                              |                 |  |              |           |  |            |  |   |             |  |   | Additional |  |   | During the  |   |   |          |  
|                                                              | Preferred Stock |  | Common Stock |           |  | Paid-In    |  |   | Development |  |   |            | 
|                                                              | Shares          |  |              | Par Value |  | Shares     |  |   | Par Value   |  |   | Capital    |  |   | Stage       |   |   | Total    |  
|                                                              |                 |  |              |           |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, December 31, 2006                                    | 198,000         |  |              | 198       |  | 25,960,326 |  |   | 25,960      |  |   | 7,874,855  |  |   | (8,362,335  | ) |   | (461,322 | )
|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
      debt       | -               |  |              | -         |  | -          |  |   | -           |  |   | 39,600     |  |   | -           |   |   | 39,600   |  
|Net loss                                                      | -               |  |              | -         |  | -          |  |   | -           |  |   | -          |  |   | (519,345    | ) |   | (519,345 | )
|                                                              |                 |  |              |           |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, December 31, 2007                                    | 198,000         |  |              | 198       |  | 26,860,326 |  |   | 26,860      |  |   | 8,132,795  |  |   | (8,881,680  | ) |   | (721,827 | )
|Net loss                                                      | -               |  |              | -         |  | -          |  |   | -           |  |   | -          |  |   | (73,339     | ) |   | (73,339  | )
|                                                              |                 |  |              |           |  |            |  |   |             |  |   |            |  |   |             |   |   |          |  
|Balance, March 31, 2008                                       | 198,000         |  | $            | 198       |  | 26,860,326 |  | $ | 26,860      |  | $ | 8,132,795  |  | $ | (8,955,019  | ) | $ | (795,166 | )

SEE ACCOMPANYING NOTES

---

STRATEGIC INTERNET INVESTMENTS, INCORPORATED(A
Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED FINANCIAL
STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|1. | Nature of Operations and Ability to Continue as a
      Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Strategic Internet Investments, Incorporated (the
      Company) is in the development stage and is devoting its efforts to
      developing real estate projects in the Middle East.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These unaudited interim consolidated 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 twelve months. Realization values may be substantially different from
      carrying values as shown and these financial statements do not give effect
      to adjustments that would be necessary to the carrying values and
      classification of assets and liabilities should the Company be unable to
      continue as a going concern. At March 31, 2008, the Company had not yet
      achieved profitable operations, has accumulated losses of $8,955,019 since
      its inception, has a working capital deficiency of $795,167 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. 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, 2008, by issuing equity securities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The accompanying unaudited interim consolidated 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, 2007, as filed with the
      United States Securities and Exchange Commission.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The results of operations for the three months ended
      March 31, 2008 are not indicative of the results that may be expected for
      the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Deferred Investment Costs Note 4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Deferred investment costs consist of consultants fees
      and payments to reimburse Star Leisure and Entertainment Inc. with respect
      to the acquisition of Gulf Star World Development W.L.L., net of a
      write-down to a nominal value of $1.00.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

1

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|3. | Loans Payable Note 7
|-- | ---------------------

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | March 31, |  |   | December
      31, | 
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- |  | - | ------------------ | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2008      |  |   | 2007               | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| | a) | Loan payable to a company controlled by a director of the
      Company including accrued interest of $2,887 (December 31, 2007: $2,605).
      The loan is unsecured, bearing interest at 12% per annum and is repayable
      on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $ | 9,688     |  | $ | 9,407              | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| | b) | Loans payable to companies controlled by directors of the
      Company. The loans are unsecured, non-interest bearing, and repayable upon
      demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 38,596    |  |   | 19,217             | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| | c) | Loans payable to a company controlled by a director of
      the Company including accrued interest of $57,020 (December 31, 2007:
      $53,123). The loans are unsecured, bearing interest at 10% per annum, and
      repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 160,227   |  |   | 156,329            | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| | d) | Loans payable to a company controlled by a director of
      the Company, including accrued interest payable of $18,086 (December 31,
      2007: $14,341), pursuant to Convertible Loan Agreements. 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 $135,730 may be converted into
      1,762,858 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
      year ended December 31, 2007 an amount of $39,600 (December 31, 2006:
      $60,850) was recognized as the intrinsic value of the beneficial
      conversion feature of these loans and this amount was included in interest
      expense. |   | 153,816   |  |   | 150,071            | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| | e) | Loan payable to a company controlled by a director of the
      Company, including accrued interest of $10,482 (December 31, 2007:
      $9,018), pursuant to Convertible Loan Agreements. 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 $49,700 may be converted into 416,248 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 at $0.12. During the year ended December 31, 2007 an amount of $NIL
      (December 31, 2006: $16,950) was recognized as the intrinsic value of the
      beneficial conversion feature of the loan and this amount was included in
      interest expense.                                               |   | 60,182    |  |   | 58,718             | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |           |  |   |                    | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $ | 422,509   |  | $ | 393,742            | 

2

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|4. | Capital Stock Notes 3 and 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On May 24, 2007, the Company issued a total of 700,000
      shares to two consulting firms for investor relations consulting services
      to be provided over a twelve month period, valued at $140,000. The Company
      determined the fair value of the shares issued using the market price on
      the share issuance date. At March 31, 2008, $20,400 is recorded as
      prepaid.                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Class A Convertible Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Class A convertible preferred shares have a par value
      of $0.001 and are convertible to common shares at $4.00 per share during
      the first 180 days following issuance, and thereafter at the average of
      twenty consecutive days closing prices, but shall not be less than $1.50
      per share or greater than $6.00 per share. The Company has the right to
      redeem its Class A convertible preferred stock at any time by paying to
      the holders thereof the sum of $4 per share.                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Companys board of directors approved a stock option
      plan. Under the plan directors, employees and consultants may be granted
      options to purchase common stock of the Company at a price of not less
      than 100% of the fair market value of the stock. The total number of
      options granted must not exceed 15% of the outstanding common stock of the
      Company. The plan expires on July 1, 2017.                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company granted share purchase options to directors,
      employees, and consultants of the Company at the closing price of the
      Companys common stock on the date of the grants. The options have been
      granted with a term of 5 years. The stock options are exercisable at 20%
      on the date of grant, and then 20% every three months thereafter, such
      that they are fully exercisable after a period of one year from the date
      of grant.                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the period ending March 31, 2008 the Company did
      not grant any options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The weighted average fair value at the date of grant of
      the options was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                     | 2008 | 2007   
| | ----------------------------------- | ---- | -------
| |                                     |      |        
| | Weighted average fair value         | -    | $0.23  
| | Total options granted               | -    | 125,000
| | Total fair value of options granted | -    | $29,240

3

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|4. | Capital Stock Notes 3 and 5  (contd)                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                      
|   | Commitments  (contd)                                                                                                                                               
|   |                                                                                                                                                                      
|   | Stock-based Compensation  (contd)                                                                                                                                  
|   |                                                                                                                                                                      
|   | The fair value of each option grant was estimated on the
      date of the grant using the Black-Scholes option valuation model with the
      following assumptions:

| |                              | 2008 | 2007 
| | ---------------------------- | ---- | -----
| |                              |      |      
| | Expected dividend yield      | -    | 0.0% 
| | Expected volatility          | -    | 167% 
| | Risk-free Interest Rate      | -    | 4.68%
| | Expected term in
      years | -    | 5    

The expected volatility is calculated
based on the Companys historical share price.

During the period ended March 31, 2008,
the change in share purchase options outstanding are as follows:

| |                                          |  |           |   |  |          |  |  | Weighted    |  |   |           | 
| | ---------------------------------------- |  | --------- | - |  | -------- |  |  | ----------- |  | - | --------- | 
| |                                          |  |           |   |  | Weighted |  |  | Average     |  |   |           | 
| |                                          |  |           |   |  | Average  |  |  | Remaining   |  |   | Aggregate | 
| |                                          |  |           |   |  | Exercise |  |  | Contractual |  |   | Intrinsic | 
| |                                          |  | Shares    |   |  | Price    |  |  | Life        |  |   | Value     | 
| |                                          |  |           |   |  |          |  |  |             |  |   |           | 
| | Options outstanding at December 31, 2006 |  | 1,962,000 |   |  | $0.23    |  |  | 1.76 years  |  | $ | 392,400   | 
| |                                          |  |           |   |  |          |  |  |             |  |   |           | 
| | Granted during the year                  |  | 125,000   |   |  | $0.35    |  |  | 4.00 years  |  |   |           | 
| |                                          |  |           |   |  |          |  |  |             |  |   |           | 
| | Options outstanding at December 31, 2007 |  | 2,087,000 |   |  | $0.23    |  |  | 0.96 years  |  | $ | -         | 
| |                                          |  |           |   |  |          |  |  |             |  |   |           | 
| | Forfeited during the period              |  | (120,000  | ) |  | $0.29    |  |  | 0.85 years  |  |   |           | 
| |                                          |  |           |   |  |          |  |  |             |  |   |           | 
| | Options outstanding at March 31, 2008    |  | 1,967,000 |   |  | $0.23    |  |  | 0.70 years  |  | $ | -         | 

At March 31, 2008, the Company had
share purchase options outstanding as follows:

| | Number of Options | Exercise Price | Expiry Date      
| | ----------------- | -------------- | -----------------
| |                   |                |                  
| | 1,704,000         | $0.21          | September 5, 2008
| | 30,000            | $0.53          | April 15, 2009   
| | 108,000           | $0.33          | July 8, 2009     
| | 125,000           | $0.35          | January 2, 2012  
| |                   |                |                  
| | 1,967,000         |                |                  

At March 31, 2008 all of the total
outstanding share purchase options were exercisable.

4

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

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

In addition, the Company shall make
cash payments to Star Leisure totaling $100,000 to cover a portion of hard costs
accumulated by Star Leisure in progressing the Dream Island Project. During the
year ended December 31, 2003, the Company paid $34,210 as partial payment toward
the $100,000 payment. The remaining balance of $65,790 is due on or before
August 31, 2008. The Company has also agreed to reimburse Star Leisure and Jzala
Investment Group (20% shareholder of Gulf Star) for costs to be verified that
they may have incurred upon the project financing being fully secured and having
released in sufficient amounts to commence the main construction.

On August 9, 2002, the Company entered
into an assignment agreement, whereby the Company was assigned all rights and
obligations under a Dredging and Reclamation Contract entered into by Star
Leisure pertaining to the construction of The Dream Island Resort project. Under
the terms of the Dredging and Reclamation contract, the Company issued into
escrow 1,268,750 Class A Convertible Preferred shares, with a deemed value of
$5,075,000, as full payment due under this contract. These shares will be
released from escrow in stages as the dredging contract progresses. No value was
recorded for these shares due to the contingent nature of their release from
escrow. During the year ended December 31, 2006, these shares were cancelled as,
although work had commenced on the Dream Island Project, there has not yet been
sufficient progress to warrant issuance of the shares.

On March 13, 2006, the Ministry of
Finance, Bahrain (MOFB) notified Gulf Star that due to a lack of progress and
failure to advance the project in a timely basis, the MOFB intends to seek
termination of the lease contract for the Dream Island site and have Gulf Star
pay all associated expenses incurred for the enforcement thereof. In addition,
the MOFB has indicated that it reserves the right to claim damages towards all
losses it has incurred and all gains denied. The Company, Gulf Star, and Star
Leisure intend to oppose the action by the MOFB. However, due to the uncertainty
of the future viability of the Dream Island project, management has written-down
the associated deferred investment costs to a nominal value of $1.00.

5

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|4. | Capital Stock Notes 3 and 5  (contd)                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                            
|   | Commitments  (contd)                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                            
|   | Acquisition of Port Residence Project                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                            
|   | The Company entered into a letter of intent dated January
      7, 2008, to purchase 100% of the outstanding shares of a Turkish company
      (TurkCo) to be formed and, thereby, acquiring a 100% interest in the Port
      Residence Project, a real estate development project, in Calkaya, Turkey,
      as follows:
|   |                                                                                                                                                                                                                                                                                                                            
|   | a)                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            
|   | b)                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                            
|   | c)                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                            

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

6

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (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
    Number
      of
    WeightedPreferred
    Common Shares
    Average PriceShares
    
    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
    140,000198,000
    19,839,343
    
    $ 6,478,725


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

7

---

**STRATEGIC  INTERNET INVESTMENTS, INCORPORATED**(A Development Stage Company) NOTES TO THE INTERIM CONSOLIDATED
FINANCIAL STATEMENTS March 31, 2008 (Stated in U.S. Dollars)
(Unaudited)

|6. | Related Party Transactions Notes 3, 4, and
    8                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                  
|   | The Company was charged the following by shareholders,
      directors, by companies controlled by directors and/or shareholders of the
      Company, and by companies with directors in
common:

| |                    |   |                    |  |   |               |  |   | Cumulative from | 
| | ------------------ | - | ------------------ |  | - | ------------- |  | - | --------------- | 
| |                    |   |                    |  |   |               |  |   | February 28,    | 
| |                    |   |                    |  |   |               |  |   | 1989 (Date of   | 
| |                    |   | Three months ended |  |   | Inception) to | 
| |                    |   | March 31,          |  |   | March 31,     | 
| |                    |   | 2008               |  |   | 2007          |  |   | 2008            | 
| |                    |   |                    |  |   |               |  |   |                 | 
| | Consulting fees    | $ | -                  |  | $ | 17,490        |  | $ | 64,820          | 
| | Interest           |   | 9,388              |  |   | 7,301         |  |   | 104,981         | 
| | Management fees    |   | 46,125             |  |   | 46,350        |  |   | 435,512         | 
| | Office and general |   | -                  |  |   | -             |  |   | 26,944          | 
| | Rent               |   | 6,000              |  |   | 5,280         |  |   | 118,472         | 
| |                    |   |                    |  |   |               |  |   |                 | 
| |                    | $ | 61,513             |  | $ | 76,421        |  | $ | 750,729         | 

|   | At March 31, 2008, accounts payable includes $338,810
      (December 31, 2007: $288,276) due to directors of the Company and
      companies controlled by directors of the Company in respect of unpaid
      management fees and expenses incurred on behalf of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | At March 31, 2008, accounts payable also includes $15,527
      (December 31, 2007: $15,527) expenses for operating costs paid on behalf
      of the Company by companies with directors in common.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company entered into two Management Services
      Agreements dated January 1, 2007 with a director and a company controlled
      by a director of the Company. Under the terms of these agreements they
      will each be paid $7,500 per month, plus taxes where applicable, for
      management services. These agreements are for a 24-month period expiring
      on 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company also entered into a Consulting Services
      Agreement with a company controlled by a director of the Company. Under
      the terms of this agreement, the Company will pay $5,500 per month, plus
      taxes where applicable, for consulting services. This agreement was
      suspended in May 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|7. | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Certain comparative figures for the period ended March
      31, 2007, have been reclassified to conform to the financial statement
      presentation adopted for the period ended March 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|8. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Subsequent to March 31, 2008, the Company received loan
      proceeds of $16,950 and $5,358 (Cdn$5,500) from companies controlled by
      directors of the Company. The loans are unsecured, non-interest bearing,
      and repayable upon demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

8

---

|2. | Managements Discussion and Analysis of Financial
      Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Plan of Operation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company is currently devoting its efforts to
      developing The Dream Island Resort project in Manama, Bahrain. The Dream
      Island Resort project will be an integrated resort, entertainment, hotel
      and real estate facility to be built on a 41 acre man-made island off the
      north eastern coast of Manama, Bahrain.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In addition the Company entered into a Letter of Intent
      to potentially acquire by option up to a 100% indirect interest in the
      Port Residence Project is a real estate development project by purchasing
      the outstanding shares of a Turkish company. The Renaissance Residence
      Project is a real estate development project that will be located on an
      16.5 acre parcel of land near Antalya, Turkey.                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company was incorporated in Colorado on February 28,
      1989 as Jefferson Capital Corporation. Effective June 13, 1990 the Company
      changed its name to Ohio & Southwestern Energy Company. Effective July
      1, 2001, the Company and Strategic Internet Investments, Incorporated
      (Strategic), an inactive Delaware corporation incorporated on March 2,
      2001, were merged. All outstanding common shares of the Company were
      converted into an equal number of common shares of Strategic. The purpose
      of this merger was to change the corporate jurisdiction of the Company
      from Colorado to Delaware and to change the name of the Company. The
      surviving corporation of the merger is Strategic, a Delaware
      corporation.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company has an agreement to purchase 80% of the
      outstanding shares of Gulf Star World Development W.L.L. (Gulf Star), a
      Bahrain corporation, from Star Leisure & Entertainment Inc. (Star
      Leisure). Star Leisure is controlled by a director of the Company and is
      based in British Columbia, Canada. Gulf Star is the 100% owner and
      developer of the Dream Island Resort project.                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | To acquire 80% of Gulf Star, the Company must issue five
      million common shares at a price of $0.125 per share. The shares are to be
      issued over a three year period based on construction progress. In
      addition, the Company shall make cash payments to Star Leisure totaling
      $100,000 to cover a portion of hard costs accumulated by Star Leisure in
      progressing the Dream Island Project. At December 31, 2003 the Company had
      paid $34,210, with the balance of $65,790 to be paid by August 31,
      2008.                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On March 13, 2006, the Ministry of Finance, Bahrain
      (MOFB) notified Gulf Star that due to a lack of progress and failure to
      advance the project in a timely basis, the MOFB intends to seek
      termination of the lease contract for the Dream Island site. The Company,
      Gulf Star, and Star Leisure intend to oppose the action by the MOFB.
      However, due to the uncertainty of the future viability of the Dream
      Island project, management has written-down the associated deferred
      development costs to a nominal value of $1.00 at December 31,
  2005.                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Dream Island project in Bahrain will require, over
      the next twenty to twenty-four months, a significant amount of investment
      capital to be secured to ensure that all stages of development can proceed
      and be completed on schedule and on budget. The highest percentage of the
      funding requirements will be met through senior debt instruments with
      banking, investment and construction institutions and through government
      financing incentives and concessions. Further financing will be achieved
      through the pre-selling of the real estate units, villas and apartments,
      to be constructed as part of the Dream Island complex.                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The first stage of the project, dredging and reclamation
      of the 41 acre man-made island site, is to be paid by the issuance of
      1,268,750 Class A Convertible Preferred Shares in the capital of the
      Company at a deemed price of $4.00 per share to Robodh Contracting
      Establishment, Manama, Bahrain. The total value of the Dredging and
      Reclamation Works contract is $5,075,000.                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In August 2004, limited construction commenced on the
      Dream Island Project. This initial phase of work consists of the
      construction of a temporary causeway to provide access from the coast to
      the offshore site of the future island location. Large haulage trucks
      transported and dumped quarry stone to create the temporary causeway from
      which access will be gained to the island site. Once the temporary
      causeway has been completed, work will commence on the creation of the
      Dream Island perimeter of the future offshore island. Thereafter,
      reclamation dredging operations will commence to move sand into the
      perimeter thereby creating the Dream Island
site.                                                   

---

In January 2008 the Company entered
into a Letter of Intent (LOI) with certain property owners (Landowners), and
Al Habeeb & Al Mokairesh Commercial Brokers LLC (Habeeb), and G7
Entertainment Ltd. (G7) and Muzaffer Ataman (Ataman). The Company has the
potential to acquire by option up to a 100% indirect interest in the Port
Residence Project (the Port Residence Project) in Calkaya, near Kundu Antalya,
Turkey by purchasing the outstanding shares of a Turkish company (Calkaya
TurkCo) that will be incorporated to hold and own 100% of the Port Residence
Project.

The Port Residence Project is a real
estate development project located on 16.5 acres of land and when completed will
consist of eleven multi-storey buildings with 396 residential units.
Construction of three of the buildings, Phase 1, has commenced and is expected
to be complete in one years time, subject to securing funding.

Under the LOI the Company will be
granted two options to purchase up to 100% of the outstanding shares of Calkaya
TurkCo. An initial option will allow the Company to purchase up to 30% of the
outstanding shares of Calkaya TurkCo. Upon full exercise of the initial option,
the Company shall be entitled to exercise a second option to purchase the
remaining outstanding shares of Calkaya TurkCo.

Compensation to be paid to the
shareholders of Calkaya TurkCo shall, at the choice of the Company, will be paid
either in cash or by issuing common shares of the Company. Any issuance of
common shares of the Company would occur as of the date of the Option Exercise
Notice, under a Restricted Rule 144 Reg. S share issuance. The shares would be
issued at the higher value of either USD $2.00 per share, or the discounted
market price of the Company shares, as quoted on the OTC:BB whereby the
Discounted Market Price is defined by calculating the previous 10 day average
closing share price from the exercise date in question, and reducing that price
by a 25% discount.

G7 is a related party to the Company.
Mr. Abbas Salih, Director and controlling shareholder of the Company, is also
the controlling shareholder of G7, owning a 51% interest in G7 and therefore,
the contemplated agreement outlined above is a non-arms length transaction.

The LOI is subject to the completion of
a formal agreement.

The financial statements have been
prepared on a going concern basis. The Company has accumulated a deficit of
$8,955,019 since inception and at March 31, 2008 has a working capital
deficiency of $795,167. Its ability to continue as a going concern is dependent
upon the ability of the Company to generate profitable operations in the future
and/or to obtain the necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.
The Company has historically satisfied its capital needs primarily by issuing
equity securities. Management plans to continue to provide for its capital needs
during the next twelve months by issuing equity securities, private placements,
loans, and debentures convertible into equity. Additional operating capital
could be obtained through the potential exercise of management and director
stock options and/or exercise of outstanding stock purchase warrants. The
Company remains at the development stage, as there were no revenues during the
past fiscal year.

The Company's plan during the next
quarter and for the balance of 2008 is to maintain the size and staffing of its
Vancouver, British Columbia head office at the current levels. There are no
plans to hire additional employees as administrative requirements at head office
are now being adequately met by the efforts of the board members the full-time
and temporary staff and consultants. Field operations and construction
activities in Bahrain will be conducted through contracting and sub-contracting
of work.

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                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company's chief executive officer and chief financial
      officer evaluated the Company's disclosure controls and procedures as of
      the end of the period covered by this quarterly report. Based upon the
      evaluation, the Company's chief executive officer and chief financial
      officer concluded that the Company's disclosure controls and procedures
      are effective.
|   |                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the quarterly period covered by this report, there
      were no changes in the Company's internal controls over financial
      reporting that materially affected, or are reasonably likely to materially
      affect, the Company's internal controls over financial
  reporting.                                                                                                        

PART II  OTHER INFORMATION

|1. | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |  None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Unregistered Sales of Equity Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Sales of Securities Without Registration Under the
      Securities Act of 1933                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On March 11, 2005, the Company issued 4,060,643 common
      shares, net of escrowed shares, pursuant to a common stock dividend
      declared by the Board of Directors on February 14, 2005, payable to the
      shareholders of record as of March 4, 2005. In connection with this stock
      dividend, pursuant to the terms of stock option, convertible debenture,
      and stock warrant agreements the number of units or shares issuable under
      those agreements shall be increased by 20% and the exercise or conversion
      price shall be decreased by 20%. These shares are restricted under Rule
      144.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On November 15, 2002 the Company entered into a
      Convertible Loan Facility Agreement with Icon Management Ltd. (Icon)
      whereby the Company would, from time to time, borrow operating funds from
      Icon, at an interest rate of ten percent (10%), repayable on demand. The
      lender has the right to convert all or part of the principal sum and
      interest 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
      or conversion of interest. 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.
      Certain loans made under this agreement had specific maturity dates,
      thereby limiting to 2 years the lenders right to convert all or part of
      the principal sum into units. During the year ended December 31, 2004,
      Icon converted $48,537 of the loan into 825,364 units of the Company,
      including warrants exercisable at an average price of $0.06 per share,
      expiring at various dates between December 31, 2004 and March 31, 2006. On
      December 31, 2004, Icon exercised warrants to purchase 643,715 shares.
      During the year ended December 31, 2005, Icon converted $227,140 of the
      loan plus accrued interest of $23,020, into 635,901 units of the Company,
      including warrants exercisable at an average price of $0.39 per share,
      expiring at various dates between April 1, 2005 and January 31, 2007.
      During the period ended September 30, 2005, Icon also exercised warrants
      to purchase a further 420,107 shares for cash proceeds of $43,153. This
      transaction is with an offshore non-U.S. person; accordingly, these
      securities are exempt from registration pursuant to Regulation
  S.

---

On March 13, 2003 the Company completed
an offering of 650,000 units of its share capital to one accredited investor at
a price of $0.10 per unit, each unit consisting of one share of common stock and
one common stock share purchase warrant. Each common stock purchase warrant
gives the investor the right to purchase one additional share of common stock at
any time during the first two years at a price of $0.10 per share. Total cash
proceeds of $65,000 were allocated to working capital. In July 2004, 320,000 of
the warrants were exercised, and 320,000 shares were issued for cash proceeds of
$32,000. During the year ended December 31, 2005, the investor exercised the
remaining warrants to purchase a further 330,000 shares for cash proceeds of
$33,000. These shares were issued pursuant to an exemption from registration
under Section 4(6) of the Securities Act of 1933. Sale or transfer of the shares
by the investor shall be in accordance with the provisions of Regulation S, or
pursuant to registration under the Securities Act of 1933 or pursuant to an
available exemption from registration. This transaction is with an offshore
non-U.S. person; accordingly, these securities are exempt from registration
pursuant to Regulation S.

On August 10, 2003 the Company entered
into a Convertible Loan Facility Agreement with Star Leisure & Entertainment
Inc. (Star Leisure), a company controlled by a Director and Officer of
Strategic, whereby the Company would, from time to time, borrow operating funds
from Star Leisure, at an interest rate of ten percent (10%), repayable 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. Certain loans made under this agreement had specific
maturity dates, thereby limiting to 2 years the lenders right to convert all or
part of the principal sum into units. At December 31, 2005, Star Leisure had
advanced a total of $103,206 and accrued interest of $25,100. During the year
ended December 31, 2005, $81,206 of the loans matured, and the right to convert
this principal amount into units expired. On January 31, 2006 the right to
convert the remaining loan principal of $22,000 into units expired. Under the
terms of the Convertible Loan Facility Agreement, any loans that mature without
being converted or repaid become due on demand. At March 31, 2008, the Star
Leisure loan principal was $49,700 and had accrued interest of $10,482. The loan
principal is convertible into 416,248 units at conversion price of $0.12 as set
at the time the principal was borrowed. Star Leisure has not converted any part
of the principal sums advanced or accrued interest into units as of March 31,
2008. This transaction is with an offshore non-U.S. person; accordingly, these
securities are exempt from registration pursuant to Regulation S.

In January 2005, the Company issued
141,000 common shares at a deemed price of $.50 per share, for a total deemed
consideration of $70,500, pursuant to various consulting agreements for legal,
computer, and financial services. These transactions are with offshore non-U.S.
persons; accordingly, these securities are exempt from registration pursuant to
Regulation S.

The Company issued 50,000 common shares
in January 2005, at a deemed price of $0.84 per share, for a total deemed
consideration of $42,000, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation services. This transaction is with an
offshore non-U.S. person; accordingly, these securities are exempt from
registration pursuant to Regulation S, however they are restricted under Rule
144.

The Company also issued 400,000 common
shares in January 2005, at a deemed price of $0.25 per share, for a total deemed
consideration of $100,000, pursuant a Promotional and Capital Funding Agreement
for financial and investor relation services. Of these shares, 250,000 were held
in escrow and were to be released subject to the Company obtaining certain
future financial goals, however these goals were never achieved and the shares
were subsequently cancelled. This transaction is with an offshore non-U.S.
person; accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

In March 2005 the Company entered into
a Promotional and Capital Funding Agreement for financial and investor relation
services. Pursuant to this agreement, the Company issued 100,000 common shares
in May 2005, at a deemed price of $0.36 per share, for a total deemed
consideration of $36,000. This transaction is with an offshore non-U.S. person;
accordingly, these securities are exempt from registration pursuant to
Regulation S, however they are restricted under Rule 144.

In December 2005 the Company entered
into three Consulting Agreements for public relations and promotional services.
Pursuant to these agreements, the Company issued 800,000 common shares at a
deemed price of $0.25 per share, for a total deemed consideration of $200,000.
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.

---

|   | On May 5, 2006 the Company entered into a Convertible
      Loan Facility Agreement with CMB Investments Ltd. (CMB), a company
      controlled by a Director and Officer of Strategic, whereby the Company
      would, from time to time, borrow operating funds from CMB, at an interest
      rate of ten percent (10%), repayable on demand. The lender has the right
      to convert all or part of the principal sum into units at a conversion
      rate which is calculated at a discount to the average closing market price
      for ten days preceding a loan advance. Each unit consists of one common
      share of the Company and one share purchase warrant, expiring 2 years from
      the conversion date, exercisable at the applicable conversion rate. At
      March 31, 2008, the CMB loan principal was $135,730 and had accrued
      interest of $18,086. The loan principal is convertible into 1,762,858
      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 or accrued interest into units as of March 31,
      2008. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (1) Refer to the Notes of the Interim Consolidated
      Financial Statements for the Class A Convertible Preferred Shares terms of
      conversion and rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | -
      None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | Submission of Matters to a Vote of Security
      Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | -
      None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | -
      None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

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




SIGNATURES

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

|      |                    |  | Strategic Internet Investments,
      Incorporated
|----- | ------------------ |  | --------------------------------------------------
|      |                    |  |                                                   
|      |                    |  |                                                   
|Date: | May
      12, 2008 |  | /s/
      Ralph Shearing                          
|      |                    |  | Ralph Shearing, CEO, Director                     
|      |                    |  |                                                   
|      |                    |  |                                                   
|Date: | May
      12, 2008 |  | /s/
      Abbas Salih                             
|      |                    |  | Abbas Salih, CFO, Director                        

---