UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington, D.C.
20549




FORM
10-K




(Mark One)


x
            Annual
      report under Section 13 or 15(d) of the Securities Exchange Act of 1934
              for
      the fiscal year ended December 31,
      2008.o
            Transition
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934
              for
      the transition period from ________to________.




Commission file number: 000-28311




SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(Exact
name of small business issuer as specified in its charter)




Texas
            76-027334(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification
Number)




333 Hudson Street, Suite
901, New York, NY  10013


(Address
of Principal Executive Office) (Postal Code)




(212)
414-9600


(Issuer’s
telephone number, Including Area Code)




Securities registered under Section
12(g) of the Exchange Act:




Title of Each
Class
 Common
Stock ($0.0001 Par Value)




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




Yes
      x
            
            No
      o




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K þ.




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).




Yes
      x
            
            No
      o




The
registrant's total revenues for the year ended December 31, 2008 were $
0.




The
aggregate market value of the registrant's common stock, (the only class of
voting stock), held by non-affiliates was $522,963 based on the average of the
closing bid and asked prices for the common stock on April 14, 2009. Shares of
common stock held by an executive officer or director of the issuer and any
person who beneficially owns 10% or more of the outstanding common stock have
been excluded from this computation because such persons may be deemed to be
affiliates.  This determination of affiliate status is not a
conclusive determination for other purposes.




On
April14, 2009, the number of shares outstanding of the registrant's common
stock, $0.0001 par value (the only class of voting stock), was
13,074,766.







SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.




TABLE of
CONTENTS




PagePART
      I.Item1.
              Description
      of Business
              
              2Item2.
              Description
      of Property
              
              7Item3.
              Legal
      Proceedings
              
              7Item4.
              Submission
      of Matters to a Vote of Security Holders
              
              8PART
      II.Item5.
              Market
      for Common Equity and Related Stockholder Matters
              
              9Item6.
              Management’s
      Plan of Operation
              
              10Item7.
              Financial
      Statements
              
              15Item8.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              
              31Item8A.
              Controls
      and Procedures
              
              31Item 8B.
              Other
      Information
              
              31PART
      III.Item9.
              Directors,
      Executive Officers,  Promoters and Control Persons and Corporate
      Governance; Compliance with Section 16(a)of the Exchange
    Act
              
              32Item10.
              Executive
      Compensation
              
              34Item11.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              
              35Item12.
              Certain
      Relationships and Related Transactions and Director
      Independence
              
              35Item13.
              Exhibits
              
              36Item14.
              Principal
      Accountant Fees and Services
              
              36Signatures
              
              37




1




PART
I




ITEM 1.          
DESCRIPTION OF BUSINESS




General.




As used
herein the terms “Company,” “we,” “our”, and “us” refer to Sibling Entertainment
Group Holdings, Inc., formerly Sona Development Corporation, a Texas corporation
and its subsidiaries and predecessors. The Company was
incorporated under the laws of the State of Texas on December 28, 1988, as
“Houston Produce Corporation” and we changed our name on May 14, 2007 to
“Sibling Entertainment Group Holdings, Inc.” We have entered into an Agreement
of Acquisition and Plan of Reorganization with Sibling Entertainment Group, Inc.
(“Sibling”), at the time an unrelated party, to acquire Sibling’s four wholly
owned subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc., Sibling
Music Corp., and Sibling Properties, Inc. and their subsidiaries including Dick
Foster Productions, Inc., Adrenaline MMA, Inc., Hats Holdings, Inc. amongst
others.





The
closing of the transaction is contingent upon the effectiveness of a Form S-4
registration statement with the SEC. The Form S-4 was filed on August 14, 2007
by Sibling Holdings and an amended Form S-4 will be required before
further  review by the SEC.  If the transaction closes, our
business will be that of Sibling, including the financing, producing and
managing live-stage theatrical operations, mixed martial arts events, music,
independent feature films, and theatrical real estate.





Historical
Background.





The
Houston Produce Corporation was formed for the purpose of importing fruit and
vegetables from Latin America for sale in the United States. The Company’s plan
to import fruit and vegetables was subsequently abandoned. On June 24, 1997, the
Company changed its name to “Net Masters Consultants, Inc.” as part of a plan to
become a global Internet service provider. Plans to create an Internet business
were discarded in October of 1999. On November 27, 2002, the Company changed its
name to “Sona Development Corp.” as part of a corporate restructuring designed
to make the Company more attractive to prospective business opportunities.
Management has since been searching for a suitable business opportunity to
become part of the Company by acquisition or combination.




On May
20, 2004, and subsequently amended through November 14, 2005, we entered
into a non-binding letter of intent with Idea One, Inc., (“Idea One”), a
privately owned company involved in the development of alternative energy
products through its 83% owned subsidiary, Advanced Technology Upgrading, Ltd.
(“ATU”). ATU, which is located in Israel, has developed, tested and patented a
rechargeable magnesium battery in conjunction with Bar Ilan Research and
Development Company, Ltd., (“Birad”), based on technology acquired from Bar Ilan
University. Idea One believes that the ATU magnesium battery exhibits many
characteristics that are superior to existing battery systems, including a
longer cycle, extended shelf life and higher energy density. The ATU battery is
also environmentally friendly.




The
letter of intent, as amended, anticipated that Idea One would be acquired by us
in a reverse merger transaction pursuant to which the shareholders of Idea One
will control the combined entity. The closing date for the reverse merger
transaction, as contemplated in the letter of intent, as amended, was April 30,
2006.




Idea One
was unable to satisfy certain conditions of the Letter of Intent which caused us
to abandon our efforts to acquire Idea One on April 28, 2006. We reported our
abandonment of the Letter of Intent in a Form 8-K filed with the Securities and
Exchange Commission on May 1, 2006.





On June
28, 2006 we entered into Agreement of Acquisition and Plan of Reorganization
(the “Agreement”) with Sibling Entertainment Group, Inc. (“Sibling”), an
unrelated party at the time. The Agreement provides for the acquisition of
Sibling’s subsidiaries. Sibling is an entertainment development and production
company based in New York City.




2





Pursuant
to the Agreement, the respective companies will effect a share exchange by which
we will issue shares of common stock and purchase warrants to Sibling in
exchange for all of the issued and outstanding shares of Sibling’s subsidiaries
on the closing date.




The
Agreement was amended on December 15, 2006. The amended Agreement increased the
shares issued and warrants granted by us to 36,190,085 shares and 22,865,324
purchase warrants, the warrants have terms ranging from 3 to 5 years at exercise
prices ranging from $0.275 per share to $1.00 per share. The share and warrant
increases are related to a debt placement, employment agreements, the
prospective acquisition of an entertainment production company, a shareholder
relations agreement, a corporate services agreement, and broker
agreements.




The
closing date of the Agreement was initially extended to February 9, 2007,
subject to each party obtaining shareholder approval.




On
February 9, 2007, we held a special meeting of shareholders to approve an
Agreement of Acquisition and Plan of Reorganization, as amended, to acquire the
four wholly owned subsidiaries from Sibling Entertainment Group, Inc., to amend
our articles of incorporation to effect a name change to “Sibling Entertainment
Group Holdings, Inc.” and to elect four directors to join the our current board
of directors. On May 14, 2007, we changed our name to “Sibling Entertainment
Group Holdings, Inc.”




The
shareholders approved the Agreement of Acquisition and Plan of Reorganization,
approved the name change to Sibling Entertainment Group Holdings, Inc. and
elected Mitchell Maxwell, Victoria Maxwell, James Cardwell and Richard Bernstein
to our board of directors.




Subsequent to our February 9, 2007
shareholders meeting, the SEC has advised us that we are required to file a Form
S-4 registration statement with the SEC and have such S-4 registration statement
declared effective by the SEC to close our transaction with Sibling
Entertainment Group, Inc.The Form S-4 was filed on August 14,
2007 bythe Company and
due the passage of time an amended Form S-4 must be filed prior to further
review by the SEC, or a new Form S-4 if the original filing has been declared
abandoned by the SEC.




Selection
of a Business




Since we
have no current business, and, in the event the anticipated merger with Sibling
Entertainment Group, Inc. is not consummated, our plan of operation will be to
seek one or more suitable business combinations or acquisitions to create value
for our shareholders. Management has adopted a conservative policy of seeking
opportunities that it considers to be of exceptional quality. Therefore, we may
have to wait some time before consummating a suitable transaction. Management
recognizes that the higher the standards it imposes upon us, the greater may be
its competitive disadvantage when vying with other acquiring interests or
entities.




The
Company does not intend to restrict its consideration to any particular business
or industry segment, though management intends to continue its focus on
opportunities related to natural resources. Due to our lack of financial
resources, the scope and number of suitable business ventures is limited. We are
therefore most likely to participate in a single business venture. Accordingly,
the Company will not be able to diversify and will be limited to one merger or
acquisition. The lack of diversification will prevent us from offsetting losses
from one business opportunity against profits from another.




The
decision to participate in a specific business opportunity will be made upon
management’s analysis of the quality of the opportunity’s management and
personnel, the anticipated acceptability of products or marketing concepts, the
merit of technological changes and numerous other factors which are difficult,
if not impossible, to analyze through the application of any objective criteria.
Further, it is anticipated that the historical operations of a specific venture
may not necessarily be indicative of the potential for the future because of the
necessity to substantially shift a marketing approach, expand operations, change
product emphasis, change or substantially augment management, or make other
changes. The Company will be partially dependent upon the management of any
given business opportunity to identify such problems and to implement, or be
primarily responsible for the implementation of required changes.




3




Since we
may participate in a business opportunity with a newly organized business or
with a business which is entering a new phase of growth, it should be emphasized
that the Company may incur risk due to the failure of the target’s management to
have proven its abilities or effectiveness, or the failure to establish a market
for the target’s products or services, or the failure to realize
profits.




The
Company will not acquire or merge with any company for which audited financial
statements cannot be obtained. Management anticipates that any opportunity in
which we participate will present certain risks. Many of these risks cannot be
adequately identified prior to selection of a specific opportunity. Our
shareholders must therefore depend on the ability of management to identify and
evaluate such risks. Further, in the case of some of the opportunities available
to us, it may be anticipated that some of these opportunities are yet to develop
as going concerns or that some of these opportunities are in the development
stage in that some have not generated significant revenues from principal
business activities prior to our participation.




Acquisition
of Business




Implementation
of a structure for any particular business acquisition may involve a merger,
consolidation, reorganization, joint venture, franchise or licensing agreement
with another corporation or entity. The Company may also purchase stock or
assets of an existing business. On the completion of a transaction, it is
possible that present management and shareholders of the Company would not
remain in control of the Company. Further, our sole officer and director may, as
part of the terms of any transaction, resign, to be replaced by new officers and
directors without a vote of our shareholders.




We
anticipate that any securities issued in any such reorganization would be issued
in reliance on exemptions from registration under applicable federal and state
securities laws. However, in certain circumstances, as a negotiated element of
any transaction, the Company may agree to register securities either at the time
a transaction is consummated, under certain conditions, or at a specified time
thereafter. The issuance of substantial additional securities and their
potential sale into any trading market may have a depressive effect on such
market.




While the
actual terms of a transaction to which the Company may be a party cannot be
predicted, it may be expected that the parties to a business transaction will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition in a so called “tax-free” reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the “Code”). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, our shareholders would retain less than 20% of the issued
and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.




Our due
diligence process will require that management meet personally with the
personnel involved in any given transaction, visit and inspect material
facilities, obtain independent analysis or verification of the information
provided, check references for management and key persons, and take other
reasonable investigative measures, to the extent of our limited financial
resources and management expertise.




The
manner in which we participate in an opportunity will depend on the nature of
the opportunity, the respective needs and desires of the Company and other
parties, the management of the opportunity, and our relative negotiating
strengths. Negotiations that involve mergers or acquisitions will focus on the
percentage of the Company that the target company shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company’s assets and liabilities, our shareholders will
in all likelihood hold a lesser percentage ownership interest in the Company
following any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by our current shareholders.




Operation of Business After
Acquisition




The
Company’s operation following its merger or acquisition of a business will be
dependent on the nature of the business and the interest acquired. We are unable
to determine at this time whether the Company will be in control of the business
or whether present management will be in control of the Company following the
acquisition. We may expect that any future business will present various
challenges that cannot be predicted at the present time.




4




Government
Regulation




The
Company cannot anticipate the government regulations, if any, to which we may be
subject until we have acquired an interest in a business. The use of assets to
conduct a business that we may acquire could subject us to environmental, public
health and safety, land use, trade, or other governmental regulations and state
or local taxation. Our selection of a business in which to acquire an interest
will include an effort to ascertain, to the extent of the limited resources of
the Company, the effects of any government regulation on the prospective
business of the Company. However, in certain circumstances, such as the
acquisition of an interest in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of government
regulation.




Competition




We will
be involved in intense competition with other business entities, many of which
will have a competitive edge over us by virtue of their stronger financial
resources and prior experience in business. The Company can provide no assurance
that we will be successful in obtaining a suitable business
opportunity.




Marketability




As we
currently are not involved in selling products or services, there can be no
assurance that we will be successful in marketing any such products or services
or whether a market will develop.




Patents, Trademarks,
Licenses, Franchises, Concessions, Royalty Agreements and Labor
Contracts




We
currently have no patents, trademarks, licenses, franchises, concessions,
royalty agreements or labor contracts.




Research
and Development




We spent
no amounts on research and development activities during each of the last two
fiscal years.




Employees




The
Company currently has no employees. Our executive officers devotes as much time
to the affairs of the Company as they deems appropriate. Our management expects
to use consultants, attorneys, and accountants as necessary, and does not
anticipate a need to engage any full-time employees as long as business needs
are being identified and evaluated. The need for employees and their
availability will be addressed in connection with a decision concerning whether
or not to acquire or participate in a specific business venture.




Risks
Related to Our Business




Our
future operating results are highly uncertain. Before deciding to invest in us
or to maintain or increase your investment, you should carefully consider the
risks described below, in addition to the other information contained in this
annual report. If any of these risks actually occur, our business, financial
condition or results of operations could be seriously harmed. In that event, the
market price for our common stock could decline and you may lose all or part of
your investment.




We have a history of significant
operating losses and such losses may continue in the
future.




Since our
inception in 1988, our operations have resulted in a continuation of losses and
an accumulated deficit which reached $4,349,497 at December 31, 2008. During
fiscal 2008, we recorded a net loss of $403,829. The Company has never realized
revenue from operations. We will continue to incur operating losses as we
maintain our search for a suitable business opportunity and satisfy our ongoing
disclosure requirements with the Securities and Exchange Commission
(“Commission”). Our only expectation of future profitability is dependent upon
our ability to acquire a revenue producing business opportunity, which
acquisition can in no way be assured. Therefore, we may never be able to achieve
profitability.




5




There can be no
assurance that Company will acquire Sibling Entertainment Group,
Inc.




We signed
a letter of intent to merge with Sibling Entertainment Group, Inc. on June 28,
2006. Although the shareholders approved the Agreement of Acquisition and Plan
of Reorganization, approved the name change to Sibling Entertainment Group, Inc.
and elected Maxwell Mitchell, Victoria Mitchell, James Cardwell and Richard
Bernstein to the Company’s board of directors, the closing of the Agreement of
Acquisition and Plan of Reorganization remains subject to the applicable
registration requirements of the Securities Exchange Act of 1934, as amended,
specifically, the filing and effectiveness of an S-4 registration
statement.  As a result, although we intend to close the acquisition
of the Sibling Entertainment Group, Inc. subsidiaries as soon as is practicable,
the acquisition may not occur or may take a significant period of
time.




Sibling Entertainment Group, Inc.
will not likely be profitable in the next twelve months and may never be
profitable.




Sibling
Entertainment Group, Inc. remains in the research and development stage with no
significant revenues and will not likely be profitable within the next twelve
months. Sibling Entertainment Group, Inc. results of operations will largely
depend on them having adequate access to literary rights, plays, musicals, film
scripts that are capable of being produced or acquired and successfully
marketed. Such accessibility is dependent upon numerous factors, including its
reputation and credibility in the creative community, the relationships they
have in the entertainment industry and their financial and other resources.
There can be no assurance that they will have adequate access to sources of
programs or that their efforts in developing or acquiring new programs will be
successful. If they are unable to successfully market new programs where we have
funded development costs, they will be subject to realizing a loss on such
projects. Therefore, the possibility of future profits by Sibling Entertainment
Group, Inc. is purely speculative.




Our
limited financial resources cast doubt on our ability to acquire a profitable
business opportunity.




Our
future operation is dependent upon the acquisition of a profitable business
opportunity. If we do not merge with Sibling Entertainment Group, Inc., the
prospect of another acquisition is doubtful due to the Company’s limited
financial resources. Since we have no current profitable business opportunity,
the Company is not in a position to improve this financial condition through
debt or equity offerings. Therefore, this limitation may act as a deterrent in
future negotiations with prospective acquisition candidates. Should we be unable
to acquire a profitable business opportunity the Company will, in all
likelihood, be forced to cease operations.




The market for our stock is limited
and our stock price may be volatile.




The
market for our common stock has been limited due to low trading volume and the
small number of brokerage firms acting as market makers. Because of the
limitations of our market and volatility of the market price of our stock,
investors may face difficulties in selling shares at attractive prices when they
want to. The average daily trading volume for our stock has varied significantly
from week to week and from month to month, and the trading volume often varies
widely from day to day.




We may incur significant expenses as
a result of being quoted on the Over the Counter Bulletin Board, which may
negatively impact our financial performance.




We may
incur significant legal, accounting and other expenses as a result of being
listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002,
as well as related rules implemented by the Commission, have required changes in
corporate governance practices of public companies. We expect that compliance
with these laws, rules and regulations, including compliance with Section 404 of
the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may
substantially increase our expenses, including our legal and accounting costs,
and make some activities more time-consuming and costly. As a result, there may
be a substantial increase in legal, accounting and certain other expenses in the
future, which would negatively impact our financial performance and could have a
material adverse effect on our results of operations and financial
condition.




6




Our
internal controls over financial reporting may not be considered effective,
which could result in a loss of investor confidence in our financial reports and
in turn have an adverse effect on our stock price.




Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our annual
report for the year ending December 31, 2007, we were required to furnish a
report by our management on our internal controls over financial reporting. Such
report will contain, among other matters, an assessment of the effectiveness of
our internal controls over financial reporting as of the end of the year,
including a statement as to whether or not our internal controls over financial
reporting are effective. This assessment must include disclosure of any material
weaknesses in our internal controls over financial reporting identified by
management. If we are unable to assert that our internal controls are effective,
investors could lose confidence in the accuracy and completeness of our
financial reports, which in turn could cause our stock price to
decline.




Reports to
Security Holders




The
Company is not required to deliver an annual report to security holders and will
not voluntarily deliver a copy of the annual report to the security holders.
Should we choose to create an annual report, it will contain audited financial
statements. The Company files all of its required information with the
Commission, including unaudited quarterly financial statements and year-end
audited financial statements.





The
public may read and copy any materials that we file with the Security and
Exchange Commission (SEC) at the SEC’s Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling 1-800-SEC-0330. The statements
and forms we file with the Commission have been filed electronically and are
available for viewing or copy on the Commission maintained Internet site that
contains reports, proxy, and information statements, and other information
regarding issuers that file electronically with the Commission. The Internet
address for this site can be found at: www.sec.gov.




ITEM
2.           DESCRIPTION OF
PROPERTY




The
Company does not own any real or personal property.  We do not believe
that we will need to obtain additional office space until such time as we have
acquired certain subsidiaries of Sibling Entertainment Group, Inc. or some other
business opportunity.  Currently, all office space and corporate
records are provided at the offices of Sibling Entertainment Group,
Inc.




ITEM
3.           LEGAL
PROCEEDINGS




On
December 29, 2008, Highlands Capital, Inc., a Colorado corporation, brought an
action against Sibling Entertainment Group Holdings, Inc., Sibling Entertainment
Group, Inc., Sibling Theatricals, Inc. and Mitchell Maxwell in the District
Court, Denver County of Colorado, Case No. 2009CV537; Division:
1.  The Company has engaged Evans & McFarland, LLC in Denver, CO
to act as litigation counsel for this matter.  The lawsuit involves
issues related to Highlands Capital’s consulting services agreement with one or
more of the Defendants and Highland Capital’s participation under the Company’s
Series AA debentures and other loans and investments with the other
defendants.  The Company obtained dismissal of several of the
Plaintiff’s claims, leaving only a breach of contract claim pending against the
Company.  The Company has since filed an answer and asserted various
counterclaims against Highland Capital.  The Company and the other
defendants will vigorously defend against this action.




7





On April
13, 2009, the Company was notified by counsel that Agnieska Golabek and Slawomir
Wrobel have brought an action against Sibling Entertainment Group Holdings,
Inc., Theatricals, Inc., Richfield Sports, LLC,  Worldwide MMA LLC,
James Cardwell, Mitchell Maxwell and Richard Burnstein in their individual and
corporate capacities in the District Court, Denver County of Colorado, Filing
ID. 24570904 Division: 2.  To the best of the Company’s knowledge, the
Complaint has not yet been served on any Defendants.  The lawsuit
involves a loan, investment, and/or acquisition of an interest in Sibling
Theatricals, Inc.’s mixed martial arts venture.  The plaintiffs in
this action have no contractual or other relationship with the Company, and
appear to have no grounds for bringing a legal action against the
Company.  If served, the Company will most likely seek an immediate
dismissal of the action against it.  The Company and other defendants
are reviewing the complaint in more detail, and will vigorously defend against
this action.





ITEM
4.           SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS




No
matters were submitted to a vote of security holders during the fourth quarter
of the period covered by this report.




8




PART
II




ITEM
5.           MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS




The
Company’s common stock is quoted on the Over the Counter Bulletin Board, a
service maintained by the National Association of Securities Dealer, Inc., under
the symbol, “SIBE”. Trading in the common stock in the over-the-counter market
has been limited and sporadic and the quotations set forth below are not
necessarily indicative of actual market conditions. Further, these prices
reflect inter-dealer prices without retail mark-up, mark-down, or commission,
and may not necessarily reflect actual transactions.





YEAR
            
            QUARTER
      ENDING
            
            
            HIGH
            
            
            
            LOW2009
            
            March
      31
            
            $
            0.05
            
            
            $
            0.042008
            
            December
      31
            
            $
            0.25
            
            
            $
            0.04September
      30
            
            $
            0.27
            
            
            $
            0.15June
      30
            
            $
            0.38
            
            
            $
            0.16March
      31
            
            $
            0.52
            
            
            $
            0.142007
            
            December
      31
            
            $
            1.85
            
            
            $
            0.56September
      30
            
            $
            0.55
            
            
            $
            0.28June
      30
            
            $
            0.82
            
            
            $
            0.38March
      31
            
            $
            0.90
            
            
            $
            0.31





Record
Holders




As of
December 31, 2008, there were 52 shareholders of record (based on our transfer
agent list) holding a total of 13,074,766 shares of common stock. The holders of
the common stock are entitled to one vote for each share held of record on all
matters submitted to a vote of stockholders. Holders of the common stock have no
preemptive rights and no right to convert their common stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
common stock.




Dividends




The
Company has not declared any cash dividends since inception and does not
anticipate paying any dividends in the foreseeable future. The payment of
dividends is within the discretion of the board of directors and will depend on
the Company’s earnings, capital requirements, financial condition, and other
relevant factors. There are no restrictions that currently limit the Company’s
ability to pay dividends on its common stock other than those generally imposed
by applicable state law.




Recent Sales
of Unregistered Securities




During
the 4th quarter
of 2008, there were no sales of unregistered securities.




9




ITEM
6.           MANAGEMENT'S PLAN
OF OPERATION




This
Management’s Plan of Operation and Results of Operations and other parts of this
report contain forward-looking statements that involve risks and uncertainties.
Forward-looking statements can also be identified by words such as
“anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms.
Forward-looking statements are not guarantees of future performance and our
actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed in the subsections entitled
“Forward-Looking Statements and Factors That May Affect Future Results and
Financial Condition” below and the subsection entitled “Risk Factors” above. The
following discussion should be read in conjunction with our financial statements
and notes thereto included in this report. All information presented herein is
based on our fiscal year ended December 31, 2008.




Plan of
Operation




The
Company’s plan of operation for the coming year, as discussed above, is to close
the definitive agreement with Sibling Entertainment Group Holdings, Inc., or, in
the event that a definitive agreement is not closed, to identify and acquire an
alternative business opportunity. The Company does not plan to limit its options
to any particular industry, but will evaluate each alternative opportunity on
its merits.





On
February 9, 2007, we held a special meeting of shareholders to approve an
Agreement of Acquisition and Plan of Reorganization, as amended, to acquire the
following subsidiaries of Sibling:




·
            Sibling
      Theatricals Inc.


·
            Sibling
      Pictures, Inc. (including three
subsidiaries)


·
            Sibling
      Music Corp.


·
            Sibling
      Properties, Inc.





In
addition, the articles of incorporation were to be amended to change the name of
the Company to “Sibling Entertainment Group Holdings, Inc.” and to elect four
directors to join the current Board of Directors.





The
shareholders approved the Agreement of Acquisition and Plan of Reorganization,
approved the name change to Sibling Entertainment Group, Inc. and elected
Mitchell Maxwell, Victoria Maxwell, James Cardwell and Richard Bernstein to our
board of directors.




The
closing of the Agreement of Acquisition and Plan of Reorganization remains
subject to the applicable registration requirements of the Securities Exchange
Act of 1934, as amended.




Subsequent
to our February 9, 2007 shareholders meeting, the SEC has advised us that we are
required to file a Form S-4 registration statement with the SEC and have such
S-4 registration statement declared effective by the SEC to close our
transaction with Sibling Entertainment Group, Inc. We filed the Form S-4
registration statement on August 13, 2007.   The Form S-4 is
still under review by the SEC and may be deemed abandoned after one year and a
new Form S-4 may be required to be filed before further review by the
SEC.  Based on the requirement to file an S-4 registration statement,
we may change the structure of the transaction with Sibling Entertainment Group,
Inc.




On May
14, 2007, the Company changed its name to Sibling Entertainment Group Holdings,
Inc.





Specifically,
upon the closing of the Agreement, we plan to continue Sibling’s business as
follows:




·
              Purchase
      and exploitation of literary rights as well as investments in the
      production of both film and live-stage events including the
      following:
  ·
              “WHITE
      NOISE - A Cautionary Tale”  A theatrical musical developed and
      produced with Holly Way & Company and others through White Noise
      Productions Development LLC and White Noise Development LP to open in New
      Orleans with Le Petit Theatre Du Vieuz Carre during July
      2009.   After a limited run, it is the intention to
      transfer the production to a Broadway stage in New York
    City.·
              The
      management of Adrenaline MMA Inc. (“Adrenaline”) for the production and
      promotion of Mixed Martial Arts (“MMA”) Events. Adrenaline Global headed
      by Monte Cox intends to produce several fighting events over the next
      several years.


10




·
            HATS!
      - A Musical for the Rest of Your Life” (“HATS!”) is based upon the women
      and spirit of Red Hat Society, Inc. (“RHS”). The musical premiered in
      Denver, Colorado at the New Denver Civic Theatre on October 7, 2006 and
      ran through December 31, 2006 and subsequently had two productions.:
      Harrah’s New Orleans Hotel & Casino (New Orleans) from January 25,
      2007 to April 21, 2007; and the Royal George Theatre in Chicago, Illinois
      from April 20, 2007 to July 29,
2007.




·
            A
      exclusive license with Samuel French, Inc. to manage and license all
      future production of HATS!




·
            Optimize
      revenue by licensing the HATS! trademarks and by selling HATS! Cast Album
      through Sibling Music, Inc.




·
            Development
      of a new musical, subject to negotiations, with the world-renowned
      comedian and entertainer Jerry Lewis, based upon his book “DEAN & ME,”
      a story of his life with Dean
Martin.




·
            The
      continued distribution and selling of the HATS! cast album through retail,
      theatrical venue and internet outlets and the production of additional
      cast albums of other future
productions.





·
            Strategic
      investments in third party theatrical
  productions.




·
            Development
      of an independent film production business by leveraging the acquisition
      of SPI and its subsidiaries Sibling Pictures Fund,
      LLC.




·
            Growing
      our management and consulting business with regional not-for-profit and
      professional theatre companies




·
            Ongoing
      consulting to the management of the Denver Civic Theatre, Inc.  (a
      not-for-profit organization, "DCT") for which our officers and directors
      serve as members of its board of
directors.




·
            Formation
      of alliances with companies that possess rights or agreements desired by
      us including an ongoing relationship with Sibling Entertainment,
      Inc.




Our plan
to coordinate the efforts between film, theatre, real estate, management and
music publishing follow the natural synergies that exist between the various
industries and their components. It is sometimes more difficult to develop a new
theatrical project without securing the venue, and owning sufficient theatres
provides the ability for a production company combined with a theatre owner to
assure a production access needed to advance a commercial project. It is planned
that when we do have our own theatrical production to present in our own
theaters, the production will be able to rent our venues creating a source of
sustaining income.




As both a
theatre owner/manager and presenter of original works, the long-term income
derived from the licensing of literary rights may benefit us in two ways. Many
literary works developed for the stage may also have potential as a feature
film.  Access and acquisition cost barriers may be reduced with a common
producer of both film and theatre. As we continue to develop a management
company for both real estate and theatrical productions, we will be able to
secure additional revenue sources common to the industry.





Another
natural synergy between the theatre and movie industries includes music
publishing originated or released in association with a musical or a movie. We
continue to seek partners and potential companies for acquisition within the
recording and music publishing industry.





Our plan
of operations is based on the assumptions that the Form S-4 will be declared
effective by the SEC and that the Agreement of Acquisition and Plan of
Reorganization with Sibling Entertainment Group, Inc. will
close.  There can be no guarantee that these events will actually
occur.




11




Results
of Operations




We do not
expect to generate any significant revenues within the next twelve months of
operation as we cannot anticipate when the Form S-4 will be declared effective
and the Agreement will close. Further, in the event we do not acquire Sibling
Entertainment Group, Inc., we will resume the process of identifying a favorable
business opportunity, which opportunity if acquired, may or may not produce
revenue. Therefore, due to these uncertainties, we do not expect any revenues
until such time as a revenue producing acquisition is accomplished.





The
Company’s net loss decreased from the prior year by approximately
$450,000.  The decrease was primarily the result of the $2.5 million
borrowing under debentures which resulted in interest expense of approximately
$770,000 in 2007 which included approximately $590,000 in amortization of debt
discounts.    Interest expense and related costs decreased
this year.




Capital
Expenditures





The
Company expended no amounts on capital expenditures for the period from December
28, 1988 (inception) to December 31, 2008.




Capital Resources and
Liquidity





The
Company is in the development stage and, since inception, has experienced
significant changes in liquidity, capital resources and shareholders’ equity.
The Company had current assets of $1,604 and total assets of $2,859,909 as of
December 31, 2008. These assets consist primarily of a note receivable currently
in default and the related accrued interest from Sibling Theatricals, Inc. , a
related party of $2,858,304.   Stockholders deficit in the
Company was $365,366 at December 31, 2008.





Over the
term of a letter of intent regarding a possible acquisition the Company loaned
Idea One, a private company involved in the development of battery cell
technology, a total of $550,000 through a series of convertible promissory
notes. These notes were written down to $1 as of December 31, 2005 as management
determined they were not collectible and further, if the Idea One shares were
received, it was not possible to determine their value. The definitive agreement
anticipates a share exchange pursuant to which the Company will issue up to
36,190,085 shares of common stock for all the issued and outstanding shares of
the Sibling subsidiaries on the closing date. The Company will further grant
22,865,324 share purchase warrants with terms ranging from 3 to 5 years at
exercise prices ranging from $0.275 a share to $1.00 per share





As of
April 30, 2006, the Company agreed to convert the outstanding balance, including
accrued interest, of $595,642, at $0.40 per share, to 1,489,106 common shares of
Idea One in full satisfaction of the loan receivable. The Idea One shares were
received in the second quarter of 2006. As of December 31, 2006 and 2005, these
shares are recorded at $1.





Our plan
is to coordinate the efforts between film theatre, real estate, management and
publishing following the natural synergies that exist between the various
industries and their components. It is sometimes more difficult to develop a new
theatrical project without securing the venue and owning sufficient theaters
provide the ability for a production company, combined with a theatre owner, to
assure a production the access needed to advance a commercial
project.  When we have our own theatrical production to present in our
theatres, the production will be able to rent our venues creating a source of
sustaining income.





Should
the anticipated acquisition of Sibling Entertainment Group, Inc. be abandoned,
the Company will most likely have to obtain loans from shareholders or pursue
alternative private equity placements in order to maintain its continuous
disclosure requirements until such time as an alternative acquisition or merger
candidate is identified.




The
Company’s current assets are insufficient to conduct its plan of operation over
the next twelve (12) months whether or not the acquisition of Sibling
Entertainment Group, Inc. is completed. No assurances can be given that funding
is available or would be available to the Company on acceptable terms. Our
inability to obtain funding would have a material adverse affect on our plan of
operation.




12




The
Company has no current plans for the purchase or sale of any plant or
equipment.




The
Company has no current plans to make any changes in the number of
employees.




Forward Looking Statements and
Factors That May Affect Future Results and Financial
Condition




The
statements contained in sections titled “Plan of Operation” and “Description of
Business”, with the exception of historical facts are forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
which reflect our current expectations and beliefs regarding our future results
of operations, performance, and achievements. These statements are subject to
risks and uncertainties and are based upon assumptions and beliefs that may or
may not materialize. These forward looking statements include, but are not
limited to, statements concerning:




·
            our anticipated financial
      performance and business
plan;




·
            the
      sufficiency of existing capital
resources;




·
            our
      ability to raise additional capital to fund cash requirements for future
      operations;




·
            uncertainties
      related to the Company’s future business prospects with Idea
      One;




·
              the
      ability of the Company to generate revenues to fund future
      operations;




·
            the
      volatility of the stock market and;




·
            general
      economic conditions.




We wish
to caution readers that the Company’s operating results are subject to various
risks and uncertainties that could cause our actual results to differ materially
from those discussed or anticipated; including the factors set forth in the
section entitled “Risk Factors” included elsewhere in this report. We also wish
to advise readers not to place any undue reliance on the forward looking
statements contained in this report, which reflect our beliefs and expectations
only as of the date of this report. We assume no obligation to update or revise
these forward looking statements to reflect new events or circumstances or any
changes in our beliefs or expectations, other that is required by
law.




Critical Accounting
Policies




a) Use of
Estimates





The
preparation of financial statements in conformity with United States generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.





(b) Income
Taxes





The
Company follows the liability method of accounting for income taxes. Under this
method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.





(c) Financial
Instruments





In
accordance with the requirements of SFAS No. 107, “Disclosures about Fair Value
of Financial Instruments,” the Company has determined the estimated fair value
of financial instruments using available market information and appropriate
valuation methodologies. The carrying values of cash, promissory notes, accounts
payable and amounts due to related parties approximate fair values due to the
short-term maturity of the instruments.




13




Effect of Recent
Accounting Pronouncements




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS
141R). SFAS 141R establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. This statement is effective for us beginning January 1, 2009. The
impact of the adoption of SFAS 141R on our consolidated financial position,
results of operations will largely be dependent on the size and nature of the
business combinations completed after the adoption of this
statement.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of Accounting Research Bulletin
No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS 160 also establishes disclosure requirements that clearly
identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners. This statement is effective for us beginning
January 1, 2009. We do not expect the impact of the adoption of SFAS 160 to be
material.
 
 In
February 2008, the FASB issued Financial Staff Position (FSP) SFAS 157-2, Effective Date of FASB Statement No.
157 (FSP 157-2), which delays the effective date of SFAS No. 157, Fair Value
Measurement(SFAS 157), for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually). SFAS 157
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. FSP 157-2 partially defers the effective date of SFAS
157 to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years for items within the scope of this FSP. The adoption
of SFAS 157 for all nonfinancial assets and nonfinancial liabilities is
effective for us beginning January 1, 2009. We do not expect the impact of this
adoption to be material.
 
 In April
2008, the FASB issued FSP SFAS 142-3, Determination of the Useful Life of
Intangible Assets(FSP 142-3).This guidance is
intended to improve the consistency between the useful life of a recognized
intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets(SFAS 142), and the period of expected cash flows used to measure the
fair value of the asset under SFAS 141R when the underlying arrangement includes
renewal or extension of terms that would require substantial costs or result in
a material modification to the asset upon renewal or extension. Companies
estimating the useful life of a recognized intangible asset must now consider
their historical experience in renewing or extending similar arrangements or, in
the absence of historical experience, must consider assumptions that market
participants would use about renewal or extension as adjusted for SFAS 142’s
entity-specific factors. FSP 142-3 is effective for us beginning January 1,
2009. We do not expect the impact of the adoption of FSP 142-3 to be
material.




Going
Concern




The financial statements have been
prepared on the basis of a going concern which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
Company has not generated any revenues or completed development of any
commercially acceptable products or services to date, has a working capital
deficiency of $ 3,223,671
at December 31, 2008 and has incurred losses of $4,349,497 since inception, and
further significant losses are expected to be incurred in the Company’s
development stage. The Company will depend almost exclusively on outside capital
through the issuance of common shares, and advances from related parties to
finance ongoing operating losses. The ability of the Company to continue as a
going concern is dependent on raising additional capital and ultimately on
generating future profitable operations. There can be no assurance that the
Company will be able to raise the necessary funds when needed to finance its
ongoing costs. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. The accompanying financial statements do
not include any adjustments relative to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result from the outcome of this uncertainty.




14




ITEM
7.           FINANCIAL
STATEMENTS





SONA
DEVELOPMENT CORP.


(A
Development Stage Company)





FINANCIAL
STATEMENTS





DECEMBER
31, 2008




REPORT(S)
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(S)·   For
      the Period Ending December 31, 2007 and 2008
              PAGE
      17BALANCE
      SHEETS
              PAGE
      18STATEMENTS
      OF OPERATIONS
              PAGE
      19STATEMENTS
      OF CASH FLOWS
              PAGE
      21STATEMENT
      OF STOCKHOLDERS’ DEFICIT
              PAGE
      23NOTES
      TO FINANCIAL STATEMENTS
              PAGE
      26


15


REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





ROSENBERG
RICH BAKER BERMAN & COMPANY


Report
of Independent Registered Public Accounting Firm
 
 
 To the
Board of Directors and Stockholders of
 Sibling
Entertainment Group Holdings, Inc. (a Development Stage Company)
 
 We have
audited the accompanying balance sheets of Sibling Entertainment Group Holdings,
Inc. (“the Company”) (a Development Stage Company) as of December 31, 2008 and
2007 and the related statements of operations, stockholders’ equity (deficit),
and cash flows for the years then ended, and for the period from inception
(December 28, 1988) to December 31, 2008.  These financial statements
are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Sibling Entertainment
Group Holdings, Inc. for the period from inception to December 31, 2006. Those
statements were audited by other auditors whose report has been furnished to us
and in our opinion, insofar as it relates to amounts for the period from
inception to December 31, 2006, included in the cumulative totals, is based
solely upon the report of the other auditors.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide
a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Sibling Entertainment Group
Holdings, Inc. as of December 31, 2008 and 2007 and the results of their
operations and their cash flows for the years then ended, in conformity with
U.S. generally accepted accounting principles.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in the notes to the
financial statements, the Company’s significant operating losses and significant
working capital deficiency raise substantial doubt about its ability to continue
as a going concern.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 
 /S/ Rosenberg Rich Baker Berman &
Company
 
 Bridgewater,
New Jersey
 April 15.
2009


16




Sibling Entertainment Group Holdings, Inc. (A
Development Stage Company) BALANCE
SHEETS
  2008
              
              2007$
              
              $ASSETSCURRENT
      ASSETSCash
              
              $
              -
              
              $               -Escrow
      with attorney
              
              
              1,000
              
              1,000Deposits
              
              
              604
              
              604Total
      current assets
              
              
              1,604
              
              1,604Receivable
      from related party
              
              
              2,858,304
              
              2,594,170Investments
              
              
              1
              
              1TOTAL
      ASSETS
              
              $
              2,859,909
              
              $
      2,595,775LIABILITIES
      AND STOCKHOLDERS' EQUITY(DEFICIT)CURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
              
              $
              395,066
              
              $      105,889Amounts
      due to related parties
              
              
              275,209
              
              194,233Short-term
      Loans Payable, net of discount
              
              
              2,555,000
              
              2,257,190Total
      current liabilities
              
              $
              3,225,275
              
              $
      2,557,312STOCKHOLDERS'  EQUITY
      (DEFICIT)Capital
      Stock ,  $0.0001 par value; 100,000,000 shares
      authorized;
              
              $
              1,307
              
              $1,30713,074,66
      issued and outstandingAdditional
      paid-in capital
              
              
              3,982,824
              
              3,982,824Deficit
      accumulated during the development stage
              
              
              (4,349,497
              )
              (3,945,668)Total stockholders’
      equity(deficit)
              
              $
              (365,366)
              
              $    38,463TOTAL
      LIABILITIES AND STOCKHOLDERS EQUITY
              
              $
              2,859,909
              
              $
      2,595,775
 
 The
accompanying notes are an integral part of these financial
statements.
  17


SIBLING ENTERTAINMENT GROUP HOLDINGS, INC. (A
Development Stage Company)STATEMENTS OF OPERATIONS




December
      31,
            
            
            CumulativeAmounts
      FromDecember 28,1988(inceptionto December 31,2008
            
            
            2007
            
            
            2008General
      and administrative costs
            
            $
            96,186
            
            
            $
            245,463
            
            
            $
            2,939,879Recovery
      of consulting fees
            
            
            -
            
            
            
            -
            
            
            
            (45,000
            )Gain (Loss) from
      operations
            
            $
            (96,186
            )
            
            $
            (245,463
            )
            
            $
            (2,894,879
            )Non-operating
      income (expense)Interest
      income
            
            $
            361,958
            
            
            $
            166,297
            
            
            $
            530,301Interest
      expense
            
            
            (669,601
            )
            
            
            (771,272
            )
            
            
            (1,440,873
            )Gain
      on forgiveness of debt
            
            
            -
            
            
            
            -
            
            
            
            8,000Write
      down of promissory notes
            
            
            -
            
            
            
            -
            
            
            
            (552,046
            )Net
      loss
            
            $
            (403,829
            )
            
            $
            (850,438
            )
            
            $
            (4,349,407
            )Loss
      per common share - basic and diluted
            
            $
            (0.03
            )
            
            $
            (0.07
            )Weighted
      average common shares - basic and diluted
            
            
            13,074,066
            
            
            
            12,977,859




The
accompanying notes are an integral part of these financial
statements.


18


SIBLING ENTERTAINMENT GORUP
HOLDINGS, INC.


(A
Development Stage Company)




(A
Development Stage Company)


STATEMENTS OF CASH FLOWS


December 28, 1988 ( Inception) toDecember 31, 2008


December
      31,
              
              Cumulative
      Amounts From December 28, 1988 (inception) to December
      31,Common
      stock issued for organization costs
              
              2008
              
              2007
              
              2008OPERATING
      ACTIVITIES
              
              $
              
              $
              
              $Net
      loss
              
              
              (403,829)
              
              (850,438)
              
              (4,349,497)Adjustments
      to reconcile net loss to net cash used in operating
      activities:
              
              
              -
              
              -
              
              -Common
      stock issued for consulting fees
              
              
              -
              
              -
              
              853,400Common
      stock issued for services
              
              
              -
              
              -
              
              70,830Common
      stock issued for finance costs
              
              
              -
              
              -
              
              187,500Beneficial
      conversion feature on convertible debt
              
              
              -
              
              208,157
              
              208,157Amortization
      of debt discount
              
              
              297,810
              
              380,590
              
              679,400Common
      stock issued for organization costs
              
              
              -
              
              -
              
              33Interest
      accretion on related party notes
              
              
              (361,958)
              
              (166,297)
              
              (530,446)Common
      stock issued for other services
              
              
              -
              
              -
              
              79,903Gain
      on forgiveness of debt
              
              
              -
              
              -
              
              (8,000)Write
      down of promissory notes
              
              
              -
              
              -
              
              552,047Changes
      in non-cash working capital items
              
              
              -
              
              -
              
              -Accounts
      payable and accrued liabilities
              
              
              289,177
              
              103,039
              
              724,826Advances
      and deposits
              
              
              -
              
              (604)
              
              (604)Accrued
      and unpaid amounts due to related parties
              
              
              80,975
              
              108,683
              
              356,867Net
      cash used in operating activities
              
              
              (97,825)
              
              (216,870)
              
              (1,175,585)Net
      cash used in investing activities:Promissory
      notes
              
              
              -
              
              -
              
              (550,000)Proceeds
      from repayment of related party interest
              
              
              97,825
              
              127,075
              
              127,075Advances
      to related party
              
              
              -
              
              (2,555,000)
              
              (2,555,000)Loan
      to Smart Card Technologies Co. Ltd.
              
              
              -
              
              -
              
              (600,000)Net
      cash used in investing activities
              
              
              97,825
              
              (2,427,925)
              
              (3,476,850)




19




SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


STATEMENTS OF CASH FLOWS
(continued)


December 28, 1988 (
Inception) to December 31, 2008





December
      31,
            
            
            Cumulative
      Amounts From December 28, 1988 (inception) to December 31,Net
      cash provided by financing activities:
            
            2007
            
            
            2006
            
            
            2008Advances
      from related parties
            
            
            -
            
            
            
            89,450
            
            
            
            656,568Proceeds
      from loans/short term debt
            
            
            -
            
            
            
            2,555,000
            
            
            
            3,235,000Common
      stock issued for cash
            
            
            -
            
            
            
            -
            
            
            
            760,867Net
      cash provided by financing activities
            
            
            -
            
            
            
            2,644,450
            
            
            
            4,652,435NET
      INCREASE (DECREASE) IN CASH
            
            
            (0
            )
            
            
            (345
            )
            
            
            (0
            )CASH,
      BEGINNING OF PERIOD
            
            
            (0
            )
            
            
            345
            
            
            
            (0
            )-
            
            
            
            -
            
            
            
            -CASH,
      END OF PERIOD
            
            
            (0
            )
            
            
            (0
            )
            
            
            (0
            )




The
accompanying notes are an integral part of these financial
statements.


20




SIBLING ENTERTAINMENT GROUP
HOLDINGS, INC.


(A
Developmental Stage Company)




STATEMENT OF STOCKHOLDERS'
EQUITY


December 28, 1988 (
Inception) to December 31, 2008




DeficitAccumulatedAdditional
            
            
            
            
            
            During
      theCommon
      Stock
            
            
            Paid-in
            
            
            Stock
            
            
            DevelopmentShares
            
            
            Amount
            
            
            Capital
            
            
            Subscriptions
            
            
            Stage
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $
            
            
            $Balance
      at December 28, 1998
              (date
      of inception)
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Stock
      issued for organization costs
            
            33,000
            
            
            33,000
            
            
            (32,967
            )
            
            -
            
            
            -
            
            
            33Net
      loss
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (33
            )
            
            (33
            )Balances
      at December 31, 1988 to
              December
      31, 1996
            
            33,000
            
            
            33,000
            
            
            (32,967
            )
            
            -
            
            
            (33
            )
            
            -1,000
      for 1 stock split
            
            32,967,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cancelled
      30,000,000 shares
            
            (30,000,000
            )
            
            (32,700
            )
            
            32,700
            
            
            -
            
            
            -
            
            
            -Stock
      issued for cash at $5.00 per share
            
            20,000
            
            
            2
            
            
            99,998
            
            
            -
            
            
            -
            
            
            100,000Net
      loss
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (80,025
            )
            
            (80,025
            )Balance
      at December 31, 1997
            
            3,020,000
            
            
            302
            
            
            99,731
            
            
            -
            
            
            (80,058
            )
            
            19,975Stock
      issued for services at $0.10 per share
            
            95,000
            
            
            10
            
            
            9,490
            
            
            -
            
            
            -
            
            
            9,500Stock
      issued for cash at $0.14 per share
            
            52,800
            
            
            5
            
            
            7,795
            
            
            (2,722
            )
            
            -
            
            
            5,078Net
      loss
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (33,798
            )
            
            (33,798
            )Balance
      at December 31, 1998
            
            3,167,800
            
            
            317
            
            
            117,016
            
            
            (2,722
            )
            
            (113,856
            )
            
            755Net
      loss
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (66,662
            )
            
            (66,662
            )Balance
      at December 31, 1999
            
            3,167,800
            
            
            317
            
            
            117,016
            
            
            (2,722
            )
            
            (180,518
            )
            
            (65,907
            )2
      for 1 stock split
            
            3,167,800
            
            
            317
            
            
            (317
            )
            
            -
            
            
            -
            
            
            -Stock
      issued for consulting fees
              at
      $2.00 per share
            
            320,000
            
            
            32
            
            
            639,968
            
            
            -
            
            
            -
            
            
            640,000Stock
      issued to settle trade payables
              at
      $2.00 per share
            
            20,540
            
            
            2
            
            
            41,078
            
            
            -
            
            
            -
            
            
            41,080Stock
      issued for services at
              $2.00
      per share
            
            11,960
            
            
            2
            
            
            23,918
            
            
            -
            
            
            -
            
            
            23,920Stock
      issued per preemptive rights
            
            192
            
            
            -
            
            
            17
            
            
            -
            
            
            -
            
            
            17Stock
      subscriptions received
            
            -
            
            
            -
            
            
            -
            
            
            2,722
            
            
            -
            
            
            2,722Net
      loss
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,018,914
            )
            
            (1,018,914
            )Balance
      at December 31, 2000
            
            6,688,292
            
            
            670
            
            
            821,680
            
            
            -
            
            
            (1,199,432
            )
            
            (377,082
            )


21


SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


STATEMENT OF STOCKHOLDERS'
EQUITY (continued)


December 28, 1988 (
Inception) to December 31, 2008




DeficitAccumulatedAdditional
            
            
            
            
            
            During
      theCommon
      Stock
            
            
            Paid-in
            
            
            Stock
            
            
            DevelopmentShares
            
            
            Amount
            
            
            Capital
            
            
            Subscriptions
            
            
            Stage
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $
            
            
            $Stock
      issued for consulting fees
              and
      payables at $0.08 per share
            
            
            687,500
            
            
            68
            
            
            54,932
            
            
            -
            
            
            -
            
            
            55,000Stock
      issued at $0.08 per share
              for
      rent payable
            
            
            535,000
            
            
            54
            
            
            42,746
            
            
            -
            
            
            -
            
            
            42,800Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (227,672
            )
            
            (227,672
            )Balance
      at December 31, 2001
            
            
            7,910,792
            
            
            792
            
            
            919,358
            
            
            -
            
            
            (1,427,104
            )
            
            (506,954
            )1
      for 10 reverse stock split
            
            
            (7,119,708
            )
            
            (713
            )
            
            713
            
            
            -
            
            
            -
            
            
            -Stock
      subscribed for converted debts
            
            
            -
            
            
            -
            
            
            -
            
            
            641,953
            
            
            -
            
            
            641,953Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (180,733
            )
            
            (180,733
            )Balance
      at December 31, 2002
            
            
            791,084
            
            
            79
            
            
            920,071
            
            
            641,953
            
            
            (1,607,837
            )
            
            (45,734
            )Stock
      issued for cash at $0.10 per share
            
            
            280,000
            
            
            28
            
            
            27,972
            
            
            -
            
            
            -
            
            
            28,000Stock
      issued for converted debts
            
            
            5,598,947
            
            
            560
            
            
            641,393
            
            
            (641,953
            )
            
            -
            
            
            -Stock
      issued for debt settlement
              at
      $0.20 per share
            
            
            280,538
            
            
            28
            
            
            56,080
            
            
            -
            
            
            -
            
            
            56,108Stock
      issued for debt settlement
              at
      $0.20 per share
            
            
            52,500
            
            
            5
            
            
            10,495
            
            
            -
            
            
            -
            
            
            10,500Stock
      issued for debt settlement
              at
      $0.10 per share
            
            
            50,000
            
            
            5
            
            
            4,995
            
            
            -
            
            
            -
            
            
            5,000Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (100,115
            )
            
            (100,115
            )Balance
      at December 31, 2003
            
            
            7,053,069
            
            
            705
            
            
            1,661,006
            
            
            -
            
            
            (1,707,952
            )
            
            (46,241
            )Stock
      issued for debt settlement
              at
      $0.10 per share
            
            
            735,782
            
            
            73
            
            
            73,505
            
            
            -
            
            
            -
            
            
            73,578Stock
      issued for debt settlement
              at
      $0.10 per share
            
            
            50,000
            
            
            5
            
            
            4,995
            
            
            -
            
            
            -
            
            
            5,000Stock
      issued for services at
              $0.15
      per share
            
            
            65,000
            
            
            6
            
            
            9,744
            
            
            -
            
            
            -
            
            
            9,750Stock
      issued for debt settlement
              at
      $0.10 per share
            
            
            86,000
            
            
            9
            
            
            8,591
            
            
            -
            
            
            -
            
            
            8,600Stock
      issued for debt settlement
              at
      $0.16 per share
            
            
            277,314
            
            
            28
            
            
            44,717
            
            
            -
            
            
            -
            
            
            44,745Stock
      issued for cash at $0.35 per share
            
            
            871,572
            
            
            87
            
            
            304,963
            
            
            -
            
            
            -
            
            
            305,050Subscriptions
      receivable
            
            
            -
            
            
            -
            
            
            -
            
            
            (35,000
            )
            
            -
            
            
            (35,000
            )Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (447,411
            )
            
            (447,411
            )Balance
      at December 31, 2004
            
            
            9,138,737
            
            
            913
            
            
            2,107,521
            
            
            (35,000
            )
            
            (2,155,363
            )
            
            (81,929
            )


22


SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


STATEMENT OF STOCKHOLDERS'
EQUITY (continued)


December 28, 1988 (
Inception) to December 31, 2008




DeficitAccumulatedAdditional
            
            
            
            
            
            During
      theCommon
      Stock
            
            
            Paid-in
            
            
            Stock
            
            
            DevelopmentShares
            
            
            Amount
            
            
            Capital
            
            
            Subscriptions
            
            
            Stage
            
            
            Total$
            
            
            $
            
            
            $
            
            
            $
            
            
            $Stock
      issued for cash at $0.35 per share
            
            
            914,288
            
            
            91
            
            
            319,909
            
            
            -
            
            
            -
            
            
            320,000Stock
      issued for debt settlement
              at
      $0.10 per share
            
            
            1,147,680
            
            
            115
            
            
            114,653
            
            
            -
            
            
            -
            
            
            114,768Stock
      issued for debt settlement
              at
      $0.50 per share
            
            
            50,000
            
            
            5
            
            
            24,995
            
            
            -
            
            
            -
            
            
            25,000Subscriptions
      received
            
            
            -
            
            
            -
            
            
            -
            
            
            35,000
            
            
            -
            
            
            35,000Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (407,256
            )
            
            (407,256
            )Balance
      at December 31, 2005
            
            
            11,250,705
            
            
            1,124
            
            
            2,567,078
            
            
            -
            
            
            (2,562,619
            )
            
            5,583Stock
      issued for finance
              costs
      at $0.35 per share (Note 7)
            
            
            150,000
            
            
            15
            
            
            52,485
            
            
            -
            
            
            -
            
            
            52,500Stock
      issued for consulting fees
              at
      $0.36 per share
            
            
            100,000
            
            
            10
            
            
            35,990
            
            
            -
            
            
            -
            
            
            36,000Stock
      issued for consulting fees
              at
      $0.40 per share
            
            
            176,000
            
            
            18
            
            
            70,382
            
            
            -
            
            
            -
            
            
            70,400Stock
      issued for finance
              costs
      at $0.45 per share (Note 7)
            
            
            300,000
            
            
            30
            
            
            134,970
            
            
            -
            
            
            -
            
            
            135,000Net
      loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (532,610
            )
            
            (532,610
            )Balance
      at December 31, 2006
            
            
            11,976,705
            
            
            1,197
            
            
            2,860,905
            
            
            -
            
            
            (3,095,229
            )
            
            (233,127
            )Beneficial
      conversion feature on convertible debt
            
            
            
            
            
            
            
            
            208,157
            
            
            
            
            
            
            
            
            208,157Stock
      issued for conversion of debt
            
            
            1,097,361
            
            
            110
            
            
            219,362
            
            
            
            
            
            
            
            
            219,472Debt
      forgiveness-related party debt
            
            
            
            
            
            
            
            
            16,000
            
            
            
            
            
            
            
            
            16,000Warrants
      Issued with Loans Payable
            
            
            
            
            
            
            
            
            678,400
            
            
            
            
            
            
            
            
            678,400Net
      Loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (850,438
            )
            
            (927,808
            )Balance
      at December 31. 2007
            
            
            13,074,066
            
            
            1,307
            
            
            3,982,824
            
            
            
            
            
            (3,945,668
            )
            
            38,463Net
      Loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (403,829
            )
            
            (403,829
            )Balance
      at December 31. 2008
            
            
            13,074,066
            
            
            1,307
            
            
            3,982,824
            
            
            
            
            
            (4,349,497
            )
            
            (365,366
            )




The
accompanying notes are an integral part of these financial
statements.


23


SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


NOTES TO
THE FINANCIAL STATEMENTS


DECEMBER
31, 2008 and 2007





Note 1 - Nature of
Operations and Basis of Presentation





(a) Organization





Sibling
Entertainment Group Holdings, Inc., formerly Sona Development Corp. (the
“Company”) was incorporated as Houston Produce Corporation under the laws of the
State of Texas on December 28, 1988. The Company was organized primarily for the
purpose of importing fruits and vegetables from Latin America On December 28,
2002, the Company changed its name to Sona Development Corp. The Company is
currently pursuing a potential merger with Sibling Entertainment Group, Inc.
("Sibling"), an entertainment development and production company based in New
York City, as described in Note 9. The Company is considered a development stage
company in accordance with Statement of Financial Accounting Standards (SFAS)
No. 7.





(b) Going
Concern





The
financial statements have been prepared on the basis of a going concern which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has not generated any revenues or
completed development of any commercially acceptable products or services to
date and has incurred losses of $4,349,497 since inception, and further
significant losses are expected to be incurred in the Company’s development
stage. The Company will depend almost exclusively on outside capital through the
issuance of common shares, debentures and other loans, and advances from related
parties to finance ongoing operating losses. The ability of the Company to
continue as a going concern is dependent on raising additional capital and
ultimately on generating future profitable operations. There can be no assurance
that the Company will be able to raise the necessary funds when needed to
finance its ongoing costs. On June 1, 2009, the Company has $2,555,000 of
principal due on the Series AA debentures including approximately $316,316 of
accrued interest and as of December 31, 2008  and additional accrued
interest of $159,688 the remainder of the term of the debentures.  The
collectability of outstanding notes receivable by related parties cannot be
guaranteed.  These factors raise substantial doubt about the ability
of the Company to continue as a going concern. The accompanying financial
statements do not include any adjustments relative to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result from the outcome of this uncertainty.





Note 2 - Summary of
Significant Accounting Policies





(a) Use of
Estimates





The
preparation of financial statements in conformity with United States generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.





(b) Income
Taxes





The
Company utilizes SFAS No. 109, “Accounting for Income Taxes” which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns.  Under this method, deferred income taxes are recognized
for the estimated tax consequences in future years of differences between the
tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the period in which the differences are expected to affect taxable
income.




24




Note 2 - Summary of
Significant Accounting Policies continued





(d) Financial
Instruments





In
accordance with the requirements of SFAS No. 107, “Disclosures about Fair Value
of Financial Instruments,” the Company has determined the estimated fair value
of financial instruments using available market information and appropriate
valuation methodologies. The carrying values of cash, accounts payable and
amounts due to related parties approximate fair values due to the short-term
maturity of the instruments.





(e) Stock-Based
Compensation





We
account for stock-based compensation in accordance with SFAS No. 123R, Share-Based Payment(SFAS
123R). Under the provisions of SFAS 123R, stock-based compensation cost is
estimated at the grant date based on the award’s fair value as calculated by the
Black-Scholes-Merton (BSM) option-pricing model and is recognized as expense
over the requisite service period. The BSM model requires various highly
judgmental assumptions including volatility and expected option life. If any of
the assumptions used in the BSM model change significantly, stock-based
compensation expense may differ materially in the future from that recorded in
the current period. In addition, we are required to estimate the expected
forfeiture rate and only recognize expense for those shares expected to vest. We
estimate the forfeiture rate based on historical experience. Further, to the
extent our actual forfeiture rate is different from our estimate, stock-based
compensation expense is adjusted accordingly.




The
Company accounts for equity instruments issued in exchange for the receipt of
goods or services from other than employees in accordance with SFAS No. 123 and
the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No.
96-18. Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF 96-18.





(f) Loss per
Share





The
Company computes loss per share in accordance with SFAS No. 128, “Earnings per Share” which
requires presentation of both basic and diluted earnings per share on the face
of the statement of operations. Basic loss per share is computed by dividing net
loss available to common shareholders by the weighted average number of
outstanding common shares during the period. Diluted loss per share gives effect
to all dilutive potential common shares outstanding during the period including
stock options and warrants, using the treasury method, and preferred stock,
using the if-converted method. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive.




(g) Recent Accouting
Pronouncements




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS
141R). SFAS 141R establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. This statement is effective for us beginning January 1, 2009. The
impact of the adoption of SFAS 141R on our consolidated financial position,
results of operations will largely be dependent on the size and nature of the
business combinations completed after the adoption of this
statement.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of Accounting Research Bulletin
No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting
standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to
the noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS 160 also establishes disclosure requirements that clearly
identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners. This statement is effective for us beginning
January 1, 2009. We do not expect the impact of the adoption of SFAS 160 to be
material.
 
 In
February 2008, the FASB issued Financial Staff Position (FSP) SFAS 157-2, Effective Date of FASB Statement No.
157 (FSP 157-2), which delays the effective date of SFAS No. 157, Fair Value
Measurement(SFAS 157), for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually). SFAS 157
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. FSP 157-2 partially defers the effective date of SFAS
157 to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years for items within the scope of this FSP. The adoption
of SFAS 157 for all nonfinancial assets and nonfinancial liabilities is
effective for us beginning January 1, 2009. We do not expect the impact of this
adoption to be material.
 
 In April
2008, the FASB issued FSP SFAS 142-3, Determination of the Useful Life of
Intangible Assets(FSP 142-3).This guidance is
intended to improve the consistency between the useful life of a recognized
intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets(SFAS 142), and the period of expected cash flows used to measure the
fair value of the asset under SFAS 141R when the underlying arrangement includes
renewal or extension of terms that would require substantial costs or result in
a material modification to the asset upon renewal or extension. Companies
estimating the useful life of a recognized intangible asset must now consider
their historical experience in renewing or extending similar arrangements or, in
the absence of historical experience, must consider assumptions that market
participants would use about renewal or extension as adjusted for SFAS 142’s
entity-specific factors. FSP 142-3 is effective for us beginning January 1,
2009. We do not expect the impact of the adoption of FSP 142-3 to be
material.   25


SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


NOTES TO
THE FINANCIAL STATEMENTS


DECEMBER
31, 2008 and 2007





Note 3 - Due to Related
Parties


Related party payables consist of the
following:




December
      31,2008
              
              2007Due
      to a significant shareholder (a)
              
              $
              123,106
              
              
              $
              74,833Unsecured
      payable to a shareholder with no specific
                terms
      and due on demand (b)
              
              
              -
              
              
              
              -Due
      to a company with a director in common (d)
              
              
              152,103
              
              
              
              119,400$
              275,209
              
              
              $
              194,233





The following represents related party
transactions paid or accrued during the years ended December 31, 2008 and
2007.




2008
            
            
            2007Consulting
      fees paid or accrued to a director (c)
            
            $
            -
            
            
            $
            37,900Consulting
      fees paid or accrued to a significant shareholder (a)
            
            
            42,000
            
            
            
            42,000Rent
      paid or accrued to (forgiven by) a shareholder (b)
            
            
            -
            
            
            
            (16,000
            )$
            42,000
            
            
            $
            63,900





The above transactions are in the
normal course of operation.





(a) The amounts due to related parties at
December 31, 2008 of $ 123,106 (2007 - $74,833) are due to a
significant shareholder for cash loans, consulting fees and reimbursable
expenses. The Company is indebted to this significant shareholder for cash loans
of $21,600 which bear interest at a rate of 10% per annum and is due from the
proceeds of the next financing arranged by the Company. At December 31, 2008,
the Company had accrued $4,700 of interest on the loans. The loans are unsecured
and due on demand. Overdue payments will bear interest at 12% per annum until
paid. In February 2007, the Company issued 1,097,361 shares of common stock in
settlement of an obligation of $219,472 for consulting fees, loans and expenses
due to this significant shareholder.




At
December 31, 2008, the Company was also indebted 96,806 to this significant
shareholder for consulting fees and reimbursable expenses. This additional debt
bears no interest and has no set term of repayment.




(b) In May of 2005, the Company entered
into an agreement with a shareholder for office rent and expenses at $1,000 per
month. During the year ended December 31, 2007, the balance due of $16,000 to
this shareholder was forgiven and recorded as additional paid-in
capital.





(c) On December 1, 1999, the Company
entered into a consulting agreement with the Company’s then sole officer and
director, Nora Corraco. The agreement had an automatic renewal provision unless
terminated by either party. On June 28, 2007, Ms. Corraco resigned and in fiscal
2007, the Company incurred $37,900  in consulting fees to this
director.  Subsequently, the new officers and directors have not
received any fees, salary or compensation from the Company in either years
ending 2007 and 2008 and derive all compensation from Sibling Entertainment
Group, Inc.




26





(d)The amounts are due to
Sibling Theatricals, Inc. (“STI”), a company with directors in common, at
December 31, 2008 and 2007 of $152,103 and $119,400 due for cash loans,
interest and expenses paid on behalf of the Company. The Company is indebted for
cash loans of $51,450 which bear interest at a rate of 10% per annum. At
December 31, 2008, the Company had accrued $7,554 of interest on the loans. The
loans are unsecured and due on demand.





At
December 31, 2008, the Company was also indebted $93,099 to STI for expenses
paid on its behalf. This additional debt bears no interest and has no set term
of repayment.





Related
Party Receivable





In
conjunction with the short-term financing  under Series AA debentures,
the amounts received were in turn lent to a related party, Sibling Theatrical
Inc. at an annual interest rate of 13% the interest rate increased to 15% during
the Extended period between June 1, 2008 and June 1, 2009.  The notes
were receivable 6 months after each borrowing.  As of December 31,
2008, a total of $2,594,170 was due from Sibling Theatrical Inc. representing
notes of $2,555,000 and accrued interest of $303,303.05 (net of interest
payments received of $97,825).   Sibling Theatricals, Inc. is
currently in default of interest payments and the repayment of these notes
cannot be guaranteed prior to the end of the term of June 1, 2009..





Note 4- Short-Term
Notes Payable





During
the period of May through August of 2007, the Company borrowed $2,555,000 from
various individuals payable in six months from the date of borrowing at an
annual interest rate of 13%.  In conjunction with this financing, the
lenders received for each unit equals to $10,000, 10,000 stock purchase warrants
to purchase 10,000 shares of common stock at $1 per share and 10,000 stock
purchase warrants to purchase 10,000 shares of common stock at $2.50 per
share.  The warrants expire within five years of the loan. The value
of these warrants using the, Black-Scholes method, was $678,400  and
was recorded as a discount to the debt and is amortized over the life of the
debt.  Amortization of the debt discount of $380,590 was charged to
interest expense during the period ended December 31, 2007 and $298,810 was
charged to interest expense during the period ended December 31,
2008.  The fair value of the warrants was estimated using the
following assumptions:





Expected
      volatility
            61%Expected
      dividends
            0Expected
      term
            5
      yearsRisk-free
      rate
            5.25%





If the
Company undertakes an underwritten public offering of securities for a total
subscription of $6,000,000 prior to the maturity date, in lieu of repayment of
principal and interest on the Notes, at the Note holder’s option, the Note
holder may acquire securities in the Qualified Offering in the amount of such
principal and interest.





The
Company is in default on the debentures noted above.  The interest
rate upon default was increased to 15% and the accrued balance due for interest
as of December 31, 2008 was $316,316.   The Company is working
with the debenture holders to extend the notes for one or more years, but no
such extension has been granted.




27





Note 5 - Income
Taxes




The
Company accounts for its income taxes in accordance with FASB No. 109,
“Accounting for Income Taxes.” As of December 31, 2008, the Company had net
operating loss carry forwards that may be available to reduce future years’
taxable income and will expire commencing in 2015. Availability of loss usage is
subject to change of ownership limitations under Internal Revenue Code 382.
Future tax benefits which may arise as a result of these losses have not been
recognized in these financial statements, as their realization is determined not
likely to occur and accordingly, the Company has recorded a valuation allowance
for the deferred tax asset relating to these tax loss
carry-forwards.





Note 6 - Capital
Stock





(a) Stock
options





The
Company has not issued any options on its common stock to date and has not
recorded any stock-based compensation with respect to stock
options.




28




SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


NOTES TO
THE FINANCIAL STATEMENTS


DECEMBER
31, 2008 and 2007





Note 6 - Capital
Stock  = continued





(b) Stock
issuances





For the
period April 1, 2007 though December 31, 2008, the Company did not issue any new
shares of common stock.





In
February 2007, the company issued 1,097,361 shares at $0.20 per share to a
significant shareholder in settlement of an outstanding balance of $219,472 for
cash loans, accrued interest, reimbursable expense and consulting
fees.  The settlement resulted in a charge to interest expense of
$208,157 as a result of a beneficial conversion feature.








Note 7 - Supplemental Cash
Flow Information





Actual
amounts paid for interest and income taxes for 2008 and 2007 are as
follows:




2008
            
            
            2007Interest
            
            $133,575
            
            
            $
            127,075Income
      taxes
            
            
            -
            
            
            
            -







During
the year ended December 31, 2007, warrants issued with a value of $678,400 were
recorded as a discount to the related debt for the same amount.





During
the year ended December 31, 2007, the Company recorded a discount on debt for a
beneficial conversion feature in the amount of $208,157.





During
the year ended December 31, 2007, debt from a related party in the amount of
$16,000 was forgiven and recorded as additional paid-in capital.





Note 8 -
Investment





The
company entered into a letter of intent on May 20, 2004 (and amended through
November 2005) with Idea One, Inc., a private company involved in the
development of battery cell technology. The letter of intent did not culminate
in a definitive agreement.





Over the
term of the letter of intent the Company loaned Idea One a total of $550,000
through a series of convertible promissory notes.  The notes were
written down to $1 as of December 31, 2005 as management determined they
were not collectible and further, if the Idea One shares were received, it was
not possible to determine their value. .





As of
April 30, 2006, the Company agreed to convert the outstanding balance, including
accrued interest, of $595,642, at $0.40 per share, to 1,489,106 common shares of
Idea One, in full satisfaction of the loan receivable. The Idea One shares were
received in the second quarter of 2006. As of December 31, 2007, these shares
are recorded at $1.




29




SIBLING
ENTERTAINMENT GROUP HOLDINGS, INC.


(A
Development Stage Company)


NOTES TO
THE FINANCIAL STATEMENTS


DECEMBER
31, 2008 and 2007





Note 9 - Proposed Merger
with Sibling





On
February 9, 2007, the share holders of the Company approved an Agreement of
Acquisition and Plan of Reorganization, as amended, to acquire four wholly owned
subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc., Sibling Music
Corp., and Sibling Properties, Inc. from Sibling Entertainment Group, Inc an
entertainment development and production company based in New York
City


.


Under the
reorganization, the Company is to acquire each of Sibling's four wholly owned
subsidiaries and three wholly owned subsidiaries of Sibling Pictures, Inc., all
of which own and or control each of Sibling's respective divisions and
operations of live-stage theatrical operations, music, independent feature films
and theatrical real estate.





The
definitive agreement anticipates a share exchange pursuant to which the Company
will issue up to 33,267,472 shares of common stock for all the issued and
outstanding shares of the Sibling subsidiaries on the closing date. The Company
will further grant 16,239,972 share purchase warrants with terms ranging from 3
to 5 years at exercise prices ranging from $0.275 a share to $1.00 per
share.




The
closing of the Agreement of Acquisition and Plan of Reorganization remains
subject to the applicable registration requirements of the Securities Exchange
Act of 1934, as amended. The Company intends to close the acquisition of the
Sibling Entertainment Group, Inc. subsidiaries as soon as is
practicable.




On August
19, 2008, the Agreement as amended anticipates a share exchange pursuant to
which the Company will issue up to 37,208,900 shares of common stock for all the
issued and outstanding shares of Sibling’s subsidiaries on the closing date and
will issue up to 571,340 additional shares reserved for convertible debentures
and consulting agreements. The Company will further deliver 26,657,424 purchase
warrants with terms ranging from 3 to 5 years at exercise prices ranging from
$0.275 a share to $1.00 per share to certain shareholders of Sibling as part of
the consideration for the transaction.




Note 10 - Legal
Proceedings
  On
December 29, 2008, Highlands Capital, Inc., a Colorado corporation, brought an
action against Sibling Entertainment Group Holdings, Inc., Sibling Entertainment
Group, Inc., Sibling Theatricals, Inc. and Mitchell Maxwell in the District
Court, Denver County of Colorado, Case No. 2009CV537; Division:
1.  The Company has engaged Evans & McFarland, LLC in Denver, CO
to act as litigation counsel for this matter.  The lawsuit involves
issues related to Highlands Capital’s consulting services agreement with one or
more of the Defendants and Highland Capital’s participation under the Company’s
Series AA debentures and other loans and investments with the other
defendants.  The Company obtained dismissal of several of the
Plaintiff’s claims, leaving only a breach of contract claim pending against the
Company.  The Company has since filed an answer and asserted various
counterclaims against Highland Capital.  The Company and the other
defendants will vigorously defend against this action.


30




ITEM
8.            
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE




On May 3,
2007, the Company dismissed Dale Matheson Carr-Hilton Labonte LLP (Dale
Matheson), as its independent registered public accounting firm.  The
Company hired Rosenberg Rich Baker Berman & Co. (Rosenberg) as its new
independent registered public accounting firm.  During the two prior
fiscal years ending December 31, 2005 and 2006 and the subsequent interim period
through May 3, 2007, the Company and Dale Matheson did not have any
disagreements with regard to any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.





The
Company did not have any disagreements with Rosenberg regarding accounting or
financial disclosure.





ITEM
8A.           CONTROLS AND
PROCEDURES




Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Accounting Officer (“CAO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CAO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CAO, as appropriate, to allow timely decisions regarding required
disclosure.




Management’s Report on
Internal Controls over Financial Reporting





Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally
accepted accounting principles. There has been no change in the Company’s
internal control over financial reporting during the year ended December 31,
2008 that has materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial reporting.




The
Company’s management, including the Company’s CEO and CAO, does not expect that
the Company’s disclosure controls and procedures or the Company’s internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of the
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected.





Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded that the
Company’s internal control over financial reporting was effective as of December
31, 2008.




ITEM
8B.           OTHER
INFORMATION




None.




31




PART III




ITEM
9.           DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT





Name
            
            Age
            
            Position(s) and
Office(s)Mitchell
      Maxwell
            
            56
            
            Chairman
      of the Board of Directors
              Chief
      Executive OfficerVictoria
      Maxwell
            
            45
            
            DirectorJames
      Cardwell
            
            49
            
            DirectorChief
      Financial OfficerRichard
      Bernstein
            
            55
            
            DirectorNora
      Coccaro (*)
            
            51
            
            Former
      Chief Executive Officer, ChiefFinancial
      Officer, PrincipalAccounting
      Officer and Director




(*)Nora Coccaroresigned as President,
Chief Executive Officer, Principal Accounting Officer and Director effective
June 28, 2007.  Ms. Coccaro did not resign as a result of any
disagreement with the Company on any matter related to the Company’s operations,
policies or practices.





Mitchell Maxwellwas appointed
Chairman of the Board of Directors on February 9, 2007 and President and Chief
Executive Officer as of June 28, 2007. Mr. Maxwell has been involved in the
entertainment business for over twenty five year and has produced seven Broadway
shows, twenty seven Off-Broadway shows, four national tours, three West End
shows and five independent films.  He is currently President of
Sibling Entertainment Group, Inc. and Chairman of the Denver Civic Theatre,
Inc.





Mr.
Maxwell attended Tufts University where he is currently an adjunct
professor.





Victoria Maxwellwas appointed
a Director on February 9, 2007.  Ms. Maxwell has over twenty years in
the entertainment business.  Ms. Maxwell has produced numerous theatre
and film projects and con-founded three entertainment companies. She has
collaborated on many projects with her brother, Mitchell Maxwell, and is
co-founder and Vice President of Sibling Entertainment Group,
Inc.  Ms. Maxwell is a member of the Board of Directors of the Denver
Civic Theatre, Inc.





James “Jay” Cardwell was
appointed a Director on February 9, 2007 and became the Chief Financial Officer
as of June 28, 2007.   Mr. Cardwell has been the Chief Financial
Officer and Chief Operating Officer of Sibling Entertainment Group, Inc since
2004.  He is also the Executive director and Board Member of the
Denver Civic Theatre, Inc.   Before joining Sibling Entertainment
Group, Inc. Mr. Cardwell was the Deputy Director (1999-2001) of the National
Jazz Museum in Harlem.  Previously, Mr. Cardwell was a consultant to
Denstu, Inc. which provided consulting services to the theatrical industry and a
producer of the original New York musical production of NUNSENSE.  Mr.
Cardwell started his career as a CPA with Arthur Andersen in St. Louis,
MO.





Richard Bernsteinis a veteran
of the entertainment industry with over 20 years experience as a artist manager,
booking agent, record producer, and a theatrical stage producer.  Mr.
Bernstein is President of Bernstein Entertainment Corporations and the Denver
Civic theatre and is a member of the American Society of Composer, Authors and
Publishers.  Mr. Bernstein has been a Director of Sibling
Entertainment Group, Inc. since 2006.




32




Compensation
of Directors




The
Company’s directors and officers are not currently compensated for their
services as directors or officers of the Company. Directors currently are not
reimbursed for out-of-pocket costs incurred in attending meetings.




Board of
Directors Committees




The board
of directors has not yet established an audit committee or a compensation
committee. An audit committee typically reviews, acts on and reports to the
board of directors with respect to various auditing and accounting matters,
including the recommendations and performance of independent auditors, the scope
of the annual audits, fees to be paid to the independent auditors, and internal
accounting and financial control policies and procedures. Certain stock
exchanges currently require companies to adopt a formal written charter that
establishes an audit committee that specifies the scope of an audit committee’s
responsibilities and the means by which it carries out those responsibilities.
In order to be listed on any of these exchanges, the Company will be required to
establish an audit committee.




Code of
Ethics




The
Company has adopted a Code of Ethics within the meaning of Item 406(b) of
Regulation S-B of the Securities Exchange Act of 1934. The Code of Ethics
applies to directors and senior officers, such as the principal executive
officer, principal financial officer, controller, and persons performing similar
functions. The Company original incorporated its Code of Ethics in Form 10K
filed with the SEC on March 30, 2004 and referenced as Exhibit 14 to this Form
10-K. Further, the Company’s Code of Ethics is available in print, at no charge,
to any security holder who requests such information by contacting the
Company.




Compliance
with Section 16(a) of the Exchange Act




Based
solely upon a review of Forms 3, 4 and 5 furnished to the Company, the Company
is unaware of an individuals or entities who during the period ended December
31, 2008, were directors, officers, or beneficial owners of more than ten
percent of the common stock of the Company, and who failed to file, on a timely
basis, reports required by Section 16(a) of the Securities Exchange Act of
1934.




33




ITEM
10.           EXECUTIVE
COMPENSATION




Executive
Compensation




Except as
set forth below, no compensation in excess of $100,000 was awarded to, earned
by, or paid to any executive officer of the Company during the years 2008, 2007
and 2006. The following table and the accompanying notes provide summary
information for each of the last three fiscal years concerning cash and non-cash
compensation paid or accrued by the Company’s current and past officers over the
past three years.




Summary
      Compensation TableLong
      Term Compensation
            
            
            
            Annual
      CompensationAwards
            
            
            PayoutsName
      and Principal

              Positions
            
            Year
            
            
            Salary
            
            
            Bonus
            
            
            Other
      Annual
              Compensation
            
            
            
            Restricted
              Stock
              Award(s)
            
            
            Securities
              Underlying
              Options
            
            
            LTIP
              payouts
            
            
            All
      Other
              Compensation($)
            
            
            ($)
            
            
            ($)
            
            
            
            ($)
            
            
            SARs(#)
            
            
            ($)
            
            
            ($)Nora
      Coccaro,
            
            2007
            
            $
            -
            
            
            -
            
            
            -
            
            
            $
            -
            
            
            -
            
            
            -
            
            
            -chief
      executive
            
            2006
            
            
            54,500
            
            
            -
            
            
            -
            
            
            
            56,000
            
            
            -
            
            
            -
            
            
            -and
      financial
            
            2005
            
            
            47,949
            
            
            -
            
            
            -
            
            
            
            5,000
            
            
            -
            
            
            -
            
            
            -officer,
      andDirector




Note: On
June 28, 2007, Nora Coccaro resigned and the new officers and directors are not
compensated by the Company for their services.




34




ITEM 11.  SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




The
following table sets forth certain information concerning the ownership of the
Company’s common stock as of December 31, 2008, with respect to: (i) each person
known to the Company to be the beneficial owner of more than five percent of the
Company’s common stock; (ii) all directors; and (iii) directors and executive
officers of the Company as a group. The notes accompanying the information in
the table below are necessary for a complete understanding of the figures
provided below. As of December 31, 2008, there were 13,074,066 shares of common
stock issued and outstanding.




Title
      of Class
            
            Name
      and Address
            
            Number
      of Shares
            
            %
      of ClassCommon
            
            Nora
      Coccaro
            
            19,250
            
            0.15%Chief
      Executive and Financial Officer, and Director1066-2610
      West Hastings Street, Vancouver, BritishColumbia
      Canada V6E 2K3Common
            
            Michael
      Baybak
            
            4,778,576
            
            36.55%%2110
      Drew Street, Suite 200Clearwater,
      Florida  33765Former
      executive officers and directors as a group (1)
            
            19,250
            
            0.15%Current
      executive officers and directors as a group (4)
            
            -
            
            0.00%


ITEM
12.           CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS





Amounts
at December 31, 2008 of 112,303  (2007 - $74,833)are due to Michael
Baybak, a significant shareholder, for cash loans, consulting fees and
reimbursable expenses. The Company is indebted to this significant shareholder
for cash loans of $21,600 which bear interest at a rate of 10% per annum and is
due from the proceeds of the next financing arranged by the Company. At December
31, 2008, the Company had accrued $4,700 of interest on the loans. The loans are
unsecured and due on demand. Overdue payments will bear interest at 12% per
annum until paid. In February 2007, the Company issued 1,097,361 shares of
common stock in settlement of an obligation of $219,472 for consulting fees,
loans and expenses due to this significant shareholder.  At December
31, 2008, the Company was also indebted in the amount of $86,003 to this
significant shareholder for consulting fees and reimbursable expenses. This
additional debt bears no interest and has no set term of repayment.





In May of
2005, the Company entered into an agreement with Michael Baybak, a shareholder,
for office rent and expenses at $1,000 per month. During the year ended December
31, 2008, the balance due of $16,000 to this shareholder was forgiven and
recorded as additional paid-in capital.





On
December 1, 1999, the Company entered into a consulting agreement with the
Company’s then sole officer and director, Nora Corraco. The agreement has had an
automatic renewal provision unless terminated by either party. On June 28, 2007,
Ms. Corraco resigned and in fiscal 2007, the Company incurred $37,900 (2005 -
$110,500) in consulting fees to this director.  Subsequently, the new
officers and directors have not received any fees, salary or compensation from
the Company in either years ending 2007 and 2008 and derive all compensation
from Sibling Entertainment Group, Inc.





Amounts
are due to Sibling Theatricals, Inc. (“STI”), a company with directors in
common, at December 31, 2008 of $145,103 due for cash loans, interest and
expenses paid on behalf of the Company. The Company is indebted for cash loans
of $51,450 which bear interest at a rate of 10% per annum. At December 31, 2008,
the Company had accrued $7,554 of interest on the loans. The loans are unsecured
and due on demand.




35





At
December 31, 2008, the Company was also indebted $91,813 to STI for expenses
paid on its behalf. This additional debt bears no interest and has no set term
of repayment.





In
conjunction with the short-term financing under Series AA debentures, the
amounts received were lent to a related party, Sibling Theatrical Inc. at an
annual interest rate of 13%.  The notes were due 6 months after each
borrowing.  As of December 31, 2008, a total of $2,594,170 was due
from Sibling Theatrical Inc. representing notes of $2,555,000 and accrued
interest of $ $39,170 (net of interest payments received of
$127,075).





ITEM
13.          
EXHIBITS




Exhibits
required by Item 601 of Regulation S-B are listed in the Index to Exhibits
beginning on Page 40 of this Form 10-K, which is incorporated herein by
reference.





ITEM
14.           PRINCIPAL
ACCOUNTANT FEES AND SERVICES




Audit
Fees




Rosenberg,
Rich, Baker, Berman & Company provided audit services to the Company in
connection with its annual report for the fiscal years ended December 31, 2007
and 2008.  The aggregate fees billed by Rosenberg, Rich, Baker, Berman
& Company for the review and audit of the Company’s quarterly and annual
financial statements was approximately  $20,815 and $16,200,
respectfully.





Audit
Related Fees




Rosenberg,
Rich, Baker, Berman & Company billed to the Company no fees in 2007 and 2008
for professional services that are reasonably related to the audit or review of
the Company’s financial statements that are not disclosed in “Audit Fees” above;
and




Tax Fees




Rosenberg,
Rich, Baker, Berman & Company billed to the Company no fees in 2007 and
$2,500 in 2008 for professional tax services rendered; and




All Other
Fees




Rosenberg,
Rich, Baker, Berman & Company billed to the Company no fees in 2007 and 2008
for other professional services rendered or any other services not disclosed
above; and





Audit
Committee Pre-Approval




The
Company does not have a standing audit committee. Therefore, all services
provided to the Company by Rosenberg, Rich, Baker, Berman & Company as
detailed above were pre-approved by the Company’s board of directors. The
Company’s independent auditors, Rosenberg, Rich, Baker, Berman & Company
performed all work using only their own full time permanent
employees.




36




SIGNATURES




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 14th day of May, 2008.


Sibling Entertainment Group
      Holdings, Inc./s/ Mitchell Maxwell, Chief Executive Officer
  
 37




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.






Signature
              
              Title
              
              Date/s/
      Mitchell Maxwell
              
              Director
                  Chief
      Executive Officer
              
              April
      15, 2009Mitchell
      Maxwell/s/
      James Cardwell
              
              Director
                  Chief
      Financial Officer
              
              April
      15, 2009James
      Cardwell/s/
      Richard Bernstein
              
              Director
              
              April
      15, 2009Richard
      Bernstein




38




INDEX
TO EXHIBITS




Exhibit
      No.
            
            Page
      No.
            
            Description3(i)
            
            *
            
            Articles
      of Incorporation of the Company3(i)(b)
            
            *
            
            Amended
      Articles of Incorporation of the Company3(i)(c)
            
            **
            
            Amended
      Articles of Incorporation of the Company filed with the State of Texas on
      November 27, 2002.3(iii)
            
            *
            
            Bylaws
      of the Company14
            
            ***
            
            Code
      of Ethics dated March 1, 2004.31.1
            
            Attached
            
            Certification
      of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.31.2
            
            Attached
            
            Certification
      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
            
            Attached
            
            Certification
      of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.2
            
            Attached
            
            Certification
      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.




*
Incorporated by reference from the Form 10SB/A filed with the Commission on
April 18, 2000.




**
Incorporated by reference from the Form 10K filed with the Commission on April
3, 2003.




***
Incorporated by reference from the Form 10K filed with the Commission on March
30, 2004.





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