**UNITED
        STATES**
  **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **FORM
        10-KSB**
  *(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, 2006**.o
              Transition
                  report under Section 13 or 15(d) of the Securities Exchange Act
                  of
                  1934 for the transition period fromto.
  Commission
        file number:**000-28311**
  **SONA
        DEVELOPMENT CORP.**
 (Exact
        name of small business issuer as specified in its charter)
  **Texas**
                (State
                  or other jurisdiction of incorporation or organization)
              **76-027334**
                (IRS
                  Employer Identification Number)
  **2610-1066
        West Hastings Street, Vancouver, British Columbia, Canada V6E
        3X2******
 (Address
        of Principal Executive
        Office)          (Postal Code)
  **(604)
        602-1717**
 (Issuer’s
        telephone number, Including Area Code)
  Securities
        registered under Section 12(g) of the Exchange Act:
  **Title
                  of Each Class**
                Common
                  Stock ($0.001 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 if 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-KSB or any
        amendment to this Form 10-KSB o.
  
  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, 2006 were
        $0.
  The
        aggregate market value of the registrant's common stock, (the only class of
        voting stock), held by non-affiliates was approximately $6,882,502.91 based
        on
        the average closing bid and asked prices for the common stock on March 19,
        2007.
  On
        April
        2, 2007, the number of shares outstanding of the registrant's common stock,
        $0.0001 par value (the only class of voting stock), was 13,074,066.
  
  **TABLE
        OF CONTENTS**
  **Page****PART
                    I.**Item
                1.
                Description
                    of Business
                1Item
                2.
                Description
                    of Property
                8Item
                3.
                Legal
                    Proceedings
                8Item
                4.
                Submission
                    of Matters to a Vote of Security Holders
                8**PART
                    II.**Item
                5.
                Market
                    for Common Equity and Related Stockholder Matters
                8Item
                6.
                Managements's
                    Plan of Operation
                10Item
                7.
                Financial
                    Statements
                17Item
                8.
                Changes
                    in and Disagreements with Accountants on Accounting and Financial
                    Disclosure
                30Item
                8A.
                Controls
                    and Procedures
                30Item
                8B.
                Other
                    Information
                31**PART
                    III.**Item
                9.
                Directors
                    and Executive Officer
                32Item
                10.
                Executive
                    Compensation
                33Item
                11.
                Security
                    Ownership of Certain Beneficial Owners and Management
                34Item
                12.
                Certain
                    Relationships and Related Transactions
                34Item
                13.
                Exhibits
                36Item
                14.
                Principal
                    Accountant Fees and Services
                36Signatures
                37
 
 
  **PART
        I**
  **ITEM
        1.           DESCRIPTION OF
        BUSINESS**
  **General.** ****
  As
        used
        herein the terms “Company,” “we,” “our”, and “us” refer to Sona Development
        Corporation, a Texas corporation and its subsidiaries and predecessors, unless
        the context indicates otherwise. The Company was incorporated under the laws
        of
        the State of Texas on December 28, 1988, as “Houston Produce Corporation” 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, as amended November 1 and 19, 2004, December 28, 2004, March 22,
        2005,
        April 22, 2005, July 15, 2005 and November 14, 2005, we entered into a
        non-binding letter of intent, as amended, 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 a tested and patented
        rechargeable magnesium battery in conjunction with Bar Ilan Research and
        Development Company, Ltd., (“Birad”), based on technology acquired from the 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.
  Over
          the
          term of the Letter of Intent we loaned Idea One a total of $550,000 through
          a
          series of convertible promissory notes. Interest of $2,046 was accrued
          on these
          notes during 2004 however the Company did not continue to accrue interest
          beyond
          December 31, 2004, and the notes were written down to $1 as of December
          31, 2005
          because we determined they were not collectible.
  The
          convertible promissory notes, as amended, were to automatically convert
          into
          Idea One common shares in the event that the transactions contemplated
          in the
          Letter of Intent were not completed by April 30, 2006. Since the transactions
          contemplated in the Letter of Intent were not completed by April 30, 2006,
          we
          agreed with Idea One to convert the outstanding balance, including accrued
          interest, of $595,642 as of April 30, 2006, at $0.40 per share into 1,489,106
          shares of Idea One, on or about May 1, 2006, in full satisfaction of the
          debt.
          As of December 31, 2006 these shares are recorded at $1.
  1
  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. The Agreement provides for the acquisition of Sibling’s
        subsidiaries. Sibling is an entertainment development and production company
        based in New York City.
  Under
        the
        reorganization, we will acquire each of Sibling’s four wholly owned
        subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc., Sibling
        Music
        Corp., and Sibling Properties, Inc. These subsidiaries 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.
  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.
  Together
        with Sibling we amended the Agreement 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, which 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
        four
        wholly owned subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc.,
        Sibling Music Corp., and Sibling Properties, Inc. from Sibling Entertainment
        Group, Inc., to amend our articles of incorporation to effect a name change
        to
“Sibling Entertainment Group, Inc.” and to elect four directors to join the our
        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.
  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 intend to file the
          Form
          S-4 registration statement within the next 30 days. Based on the requirement
          to
          file an S-4 registration statement, we may change the structure of the
          transaction with Sibling Entertainment Group, Inc.
 2
  **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.
  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 such opportunities are yet to develop
        as going concerns or that some of such opportunities are in the development
        stage in that same 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.
  3
  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 the 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.
  **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.
  4
  **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 officer devotes as much
        time
        to the affairs of the Company as she 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 $3,095,229 at December 31, 2006. During
        fiscal 2006, we recorded a net loss of $532,610. 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.
  *The
        Company’s limited financial resources cast doubt on our ability to acquire a
        profitable business opportunity.*
  The
        Company’s 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.
  *We
        are dependent upon a key person, who would be difficult to replace.*
  If
        the
        acquisition of Sibling Entertainment Group, Inc. is not consummated, our
        continued operation will be largely dependent upon the efforts of Nora Coccaro,
        our sole officer and director. We do not maintain key-person insurance on
        Ms.
        Coccaro. Our future success also will depend in large part upon the Company’s
        ability to identify, attract and retain other highly qualified managerial,
        technical and sales and marketing personnel. Competition for these individuals
        is intense. The loss of the services of Ms. Coccora, the inability to identify,
        attract or retain qualified personnel in the future, or delays in hiring
        qualified personnel could make it more difficult for us to maintain our
        operations and meet key objectives such as the acquisition of a suitable
        business opportunity.
  *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.
  6
 *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.
  *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 may be 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
        as of December 31, 2008,
 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
  The
        public may read and copy any materials that we file with the Commission at
        the
        Commission’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.
  7
  **ITEM
        2.           DESCRIPTION OF
        PROPERTY**
  The
        Company currently maintains limited office space on a month-to-month basis
        at a
        cost of $1,000 per month which is paid to Zmax Capital Corp. None of our
        directors or officers are directors, officers, or shareholders
        of Zmax Capital Corp. Additionally, neither of our directors or
        officers are related to Zmax Capital Corp. in any capacity or have any relation
        with Zmax Capital Corporation. The address of our office is 1066 West
        Hastings Street Suite 2310, Vancouver, British Columbia, Canada V6E 3X2.
        We do
        not believe that we will need to obtain additional office space until such
        time
        as we have acquired Sibling Entertainment Group, Inc. or some other business
        opportunity.
  **ITEM
        3.           LEGAL
        PROCEEDINGS**
  The
        Company is currently not a party to any legal proceedings.
  **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.
  **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, “SDVC”. 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**
              **LOW****2006**
              **December
                  31**
              **$0.45**
              **$0.20****September
                  30**
              **$0.65**
              **$0.30****June
                  30**
              **$0.65**
              **$0.17****March
                  31**
              **$0.55**
              **$0.17****2005**
              **December
                  31**
              **$0.60**
              **$0.10****September
                  30**
              **$0.31**
              **$0.18****June
                  30**
              **$0.65**
              **$0.15****March
                  31**
              **$0.20**
              **$0.12**
 
 **Record
        Holders**
  As
        of
        December 31, 2006, there were 69 shareholders of record (based on our transfer
        agent list) holding a total of 11,976,705 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.
  8
  **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 4 th quarter
        of 2006, 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, 2006.
  **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, 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
          June
          28, 2006, we entered into Agreement of Acquisition and Plan of Reorganization
          (the “Agreement”) with Sibling Entertainment Group, Inc. (“Sibling”), an
          unrelated party. The Agreement provides for the acquisition of Sibling’s
          subsidiaries. Sibling is an entertainment development and production company
          based in New York City.
  Under
          the
          reorganization, we will acquire each of Sibling’s four wholly owned
          subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc., Sibling
          Music
          Corp., and Sibling Properties, Inc. These subsidiaries 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.
  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.
  Together
          with Sibling we amended the Agreement 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, which 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
        four
        wholly owned subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc.,
        Sibling Music Corp., and Sibling Properties, Inc. from Sibling Entertainment
        Group, Inc., to amend the our articles of incorporation to effect a name
        change
        to “Sibling Entertainment Group, Inc.” and to elect four directors to join the
        our 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 intend to file the
          Form
          S-4 registration statement within the next 30 days. Based on the requirement
          to
          file an S-4 registration statement, we may change the structure of the
          transaction with Sibling Entertainment Group, Inc.
 **Results
          of Operations**
  During
          the twelve month period ended December 31, 2006 the Company was involved
          in the
          negotiation and execution of a letter of intent to acquire Idea One, and
          had
          conducted a private placement of our common stock to fund operations and
          the
          loan obligation under the letter of intent, as amended. During the twelve
          month
          period ended December 31, 2006, the Company was also involved in the negotiation
          and execution of an agreement to acquire Sibling Entertainment Group, Inc.
  We
          do not
          expect to generate any significant revenues within the next twelve months
          of
          operation as Sibling Entertainment Group, Inc. has just completed the research
          and development stage with no significant revenues. 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.
  10
  **Capital
        Expenditures**
  The
        Company expended no amounts on capital expenditures for the period from December
        28, 1988 (inception) to December 31, 2006.
  **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 $345 and total assets of $346 as of December
        31, 2006. These assets consist of cash on hand of $345 and $1 credited to
        the
        value of certain promissory notes with Idea One due April 30, 2006. Stockholders
        deficit in the Company was $233,127 at December 31, 2006.
  On
        May
        20, 2004, as amended November 1 and 19, 2004, December 28, 2004, March 22,
        2005,
        April 22, 2005, July 15, 2005, and November 14, 2005, the Company entered
        into a
        letter of intent, with Idea One, 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. 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.
 
 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.
 
 On
        June
        28, 2006, as amended December 15, 2006, the Company executed a definitive
        agreement of acquisition and plan of reorganization with Sibling Entertainment
        Group, Inc. ("Sibling"), an entertainment development and production company
        based in New York City. Under the reorganization, which is subject to
        shareholder approval, the Company is to acquire each of Sibling's four wholly
        owned subsidiaries: Sibling Theatricals, Inc., Sibling Pictures, Inc., Sibling
        Music Corp., Sibling Properties, Inc. 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.
 
 On
        closing of the transaction, the Company’s name is to be changed to Sibling
        Entertainment Group, Inc.
 
 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.
  11
  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 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. We intend to close the acquisition of the Sibling
        Entertainment Group, Inc. subsidiaries as soon as is practicable.
  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.
  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;
  12
  -
        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) Foreign
        Currency Translation
 
 The
        Company considers the U.S. dollar its functional currency. Monetary assets
        and
        liabilities resulting from foreign currency transactions are translated into
        U.S. dollar equivalents using the year end conversion rates. Revenues, expenses,
        receipts and payments are translated throughout the year at exchange rates
        prevailing at the date of the transaction. Exchange gains and losses are
        included in the loss for the year.
 
 (c) 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.
 
 (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, promissory notes, accounts
        payable and amounts due to related parties approximate fair values due to
        the
        short-term maturity of the instruments.
  13
  **Recent
        Accounting Pronouncements**
  In
        February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments-an amendment of FASB Statements No. 133 and 140”, to
        simplify and make more consistent the accounting for certain financial
        instruments. SFAS No. 155 amends SFAS No. 133, “Accounting for Derivative
        Instruments and Hedging Activities”, to permit fair value remeasurement for any
        hybrid financial instrument with an embedded derivative that otherwise would
        require bifurcation, provided that the whole instrument is accounted for
        on a
        fair value basis. SFAS No. 155 amends SFAS No. 140, “Accounting for the
        Impairment or Disposal of Long-Lived Assets”, to allow a qualifying
        special-purpose entity
        to
        hold a derivative financial instrument that pertains to a beneficial interest
        other than another derivative financial instrument. SFAS No. 155 applies
        to all
        financial instruments acquired or issued after the beginning of an entity's
        first fiscal year that begins after September 15, 2006, with earlier application
        allowed. This standard is not expected to have a significant effect on the
        Company’s future reported financial position or results of
        operations.
 
 In
        March
        2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
        Assets, an amendment of FASB Statement No. 140, Accounting for Transfers
        and
        Servicing of Financial Assets and Extinguishments of Liabilities". This
        statement requires all separately recognized servicing assets and servicing
        liabilities be initially measured at fair value, if practicable, and permits
        for
        subsequent measurement using either fair value measurement with changes in
        fair
        value reflected in earnings or the amortization and impairment requirements
        of
        Statement No. 140. The subsequent measurement of separately recognized servicing
        assets and servicing liabilities at fair value eliminates the necessity for
        entities that manage the risks inherent in servicing assets and servicing
        liabilities with derivatives to qualify for hedge accounting treatment and
        eliminates the characterization of declines in fair value as impairments
        or
        direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
        year
        beginning after September 15, 2006. This adoption of this statement is not
        expected to have a significant effect on the Company’s future reported financial
        position or results of operations.
 
 In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans.” This Statement requires an
        employer to recognize the over funded or under funded status of a defined
        benefit post retirement plan (other than a multiemployer plan) as an asset
        or
        liability in its statement of financial position, and to recognize changes
        in
        that funded status in the year in which the changes occur through comprehensive
        income.  SFAS No. 158 is effective for fiscal years ending after December
        15, 2006. The Company does not expect that the implementation of SFAS No.
        158
        will have any material impact on its financial position and results of
        operations.
  14
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measures”.
        This Statement defines fair value, establishes a framework for measuring
        fair
        value in generally accepted accounting principles (GAAP), expands disclosures
        about fair value measurements, and applies under other accounting pronouncements
        that require or permit fair value measurements. SFAS No. 157 does not
        require any new fair value measurements. However, the FASB anticipates that
        for
        some entities, the application of SFAS No. 157 will change current
        practice. SFAS No. 157 is effective for financial statements issued for fiscal
        years beginning after November 15, 2007, which for the Company would be the
        fiscal year beginning January 31, 2008. The Company is currently evaluating
        the
        impact of SFAS No. 157 but does not expect that it will have a
        material impact on its financial statements.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin
        (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
        when Quantifying Misstatements in Current Year Financial Statements.” SAB
        No. 108 addresses how the effects of prior year uncorrected misstatements
        should be considered when quantifying misstatements in current year financial
        statements. SAB No. 108 requires companies to quantify misstatements using
        a balance sheet and income statement approach and to evaluate whether either
        approach results in quantifying an error that is material in light of relevant
        quantitative and qualitative factors. SAB No. 108 is effective for periods
        ending after November 15, 2006. The Company is currently evaluating the
        impact of adopting SAB No. 108 but does not expect that it will have a
        material effect on its financial statements.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities”. This Statement permits entities to
        choose to measure many financial assets and financial liabilities at fair
        value.
        Unrealized gains and losses on items for which the fair value option has
        been
        elected are reported in earnings. SFAS No. 159 is effective for fiscal years
        beginning after November 15, 2007. The Company is currently assessing the
        impact of SFAS No. 159 on its financial position and results of
        operations.
 
 **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 $233,127 at December 31, 2006 and
        has
        incurred losses of $3,095,229 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.
  15
 
 **SONA
            DEVELOPMENT CORP.**
 **(A
            Development Stage Company)**
 
 **FINANCIAL
            STATEMENTS**
 
 **DECEMBER
            31, 2006**
 
    
 **REPORT
            OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 **BALANCE
            SHEETS**
 
 **STATEMENTS
            OF OPERATIONS**
 
 **STATEMENT
            OF STOCKHOLDERS’ DEFICIT**
  **STATEMENTS
            OF CASH FLOWS**
 
 **NOTES
            TO FINANCIAL STATEMENTS**
 
 16
 
 
 
 **REPORT
                      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                      FIRM**
 
 
 To
            the
            Stockholders and Board of Directors of Sona Development Corp.:
 
 We
            have
            audited the accompanying balance sheets of Sona Development Corp. (the
            “Company”) (a development stage company) as at December 31, 2006 and 2005 and
            the statements of operations, stockholders’ deficit, and cash flows for the
            years then ended and
            the
            cumulative period from December 28, 1988 (inception) to December 31,
            2006. 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. The financial statements for the period from December 28,
            1998
            (inception) to December 31, 2002 were reported on by other auditors and
            reflect
            a total net loss of $1,607,837 of the related cumulative totals. The
            other
            auditors’ reports have been furnished to us, and our opinion, insofar as it
            relates to amounts included for such prior periods, is based solely on
            the
            reports of such 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 an audit to obtain reasonable assurance 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. An audit also includes 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, these  financial
            statements present fairly, in all material respects, the financial position
            of
            the Company as at December 31, 2006 and 2005 and the results of its operations
            and its cash flows and the changes in stockholders’ deficit for the years then
            ended and for the period from December 28, 1998 (inception) to December
            31,
            2006 , in
            conformity with accounting principles generally accepted in the United
            States of
            America.
 
 The
            accompanying financial statements have been prepared assuming that the
            Company
            will continue as a going concern. As discussed in Note 1 to the financial
            statements, the Company has no revenue or cash flow from operations and
            its
            liabilities exceed its assets. Since the Company’s incorporation it has incurred
            an accumulated deficit of $3,095,229 as of December 31, 2006. The Company
            also
            had a working capital deficiency of $233,128 as of December 31, 2006.
            These
            conditions raise substantial doubt about its ability to continue as a
            going
            concern. Management’s plans regarding those matters are described in Note 1. The
            financial statements do not include any adjustments that might result
            from the
            outcome of this uncertainty.
 
 
 *“DMCL”*
 
 **DALE
            MATHESON CARR-HILTON LABONTE LLP**
 **CHARTERED
            ACCOUNTANTS**
 March
            22,
            2007
 Vancouver,
            Canada
 17
 **ITEM
        7.           FINANCIAL
        STATEMENTS**
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
  BALANCE
          SHEETS
 
 2006
                
                2005$
                
                
                $**ASSETS****CURRENT**Cash
                
                
                345
                
                
                28,644345
                
                
                28,644**INVESTMENT**(Note
                    7)
                
                
                1
                
                
                1346
                
                
                28,645**LIABILITIES
                    AND STOCKHOLDERS' (EQUITY) DEFICIT****CURRENT**Accounts
                    payable and accrued liabilities
                
                
                17,900
                
                
                6,371Amounts
                    due to a related party (Note 3)
                
                
                215,572
                
                
                16,691233,472
                
                
                23,062**COMMITMENTS
                    (Note 8)****STOCKHOLDERS'
                    DEFICIT****Capital
                    Stock**(Note
                    5)Authorized100,000,000
                    common shares with par value of $0.0001Issued
                    and outstanding11,976,705
                    common shares(December
                    31, 2005 - 11,250,705)
                
                
                1,197
                
                
                1,124Additional
                    paid-in capital
                
                
                2,860,905
                
                
                2,567,078Deficit
                    accumulated during the development stage
                
                
                (3,095,229
                )
                
                (2,562,619
                )(233,127
                )
                
                5,583346
                
                
                28,645
  The
          accompanying notes are an integral part of these financial
          statements.
  18
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
  STATEMENTS
          OF OPERATIONS
  
 December
                    31,
                
                CumulativeAmounts
                    FromDecember
                    28,1988 (inceptionto
                    December 31,2006
                
                2005
                
                2006$
                
                $
                
                $General
                    and administrative costs
                
                
                482,610
                
                
                182,256
                
                
                2,598,230Recovery
                    of consulting fees
                
                
                -
                
                
                -
                
                
                (45,000
                )(482,610
                )
                
                (182,256
                )
                
                (2,553,230
                )Interest
                    income
                
                
                -
                
                
                -
                
                
                2,047Gain
                    on forgiveness of debt
                
                
                -
                
                
                -
                
                
                8,000Write
                    down of promissory notes (Note 7)
                
                
                (50,000
                )
                
                (225,000
                )
                
                (552,046
                )Net
                    loss for the year
                
                
                (532,610
                )
                
                (407,256
                )
                
                (3,095,229
                )Loss
                    per common share - basic and diluted
                
                
                (0.05
                )
                
                (0.04
                )Weighted
                    average common shares -basic
                    and diluted
                
                
                11,619,576
                
                
                10,106,956
 
 The
          accompanying notes are an integral part of these financial
          statements.
  19
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
  STATEMENTS
          OF CASH FLOWS
 December
          28, 1988 ( Inception) to December 31, 200 6
 
 December
                    31,
                
                Cumulative
                    Amounts From December 28, 1988
                    (inception) to December 31,2006
                
                2005
                
                2006**OPERATING**
                
                $
                
                $
                
                $Net
                    loss for the year
                
                
                (532,610
                )
                
                (407,256
                )
                
                (3,095,229
                )Items
                    not involving an outlay of cashCommon
                    stock issued for consulting fees
                
                
                106,400
                
                
                25,000
                
                
                853,400Common
                    stock issued for services
                
                
                -
                
                
                -
                
                
                70,830Common
                    stock issued for finance costs
                
                
                187,500
                
                
                -
                
                
                187,500Common
                    stock issued for organization costs
                
                
                -
                
                
                -
                
                
                33Common
                    stock issued for other services
                
                
                -
                
                
                -
                
                
                79,903Gain
                    on forgiveness of debt
                
                
                -
                
                
                -
                
                
                (8,000
                )Write
                    down of promissory notes
                
                
                50,000
                
                
                225,000
                
                
                552,047Changes
                    in non-cash working capital itemsPrepaid
                    expenses
                
                
                -
                
                
                3,000
                
                
                -Accounts
                    payable and accrued liabilities
                
                
                11,530
                
                
                (30,539
                )
                
                449,995Accrued
                    and unpaid fees to related parties
                
                
                51,882
                
                
                -
                
                
                51,882(125,299
                )
                
                (184,795
                )
                
                (857,640
                )**INVESTING**Promissory
                    notes
                
                
                (50,000
                )
                
                (225,000
                )
                
                (550,000
                )Loan
                    to Smart Card Technologies Co. Ltd.
                
                
                -
                
                
                -
                
                
                (600,000
                )(50,000
                )
                
                (225,000
                )
                
                (1,150,000
                )**FINANCING**Advances
                    from a related party
                
                
                147,000
                
                
                18,150
                
                
                567,118Loans
                    payable
                
                
                -
                
                
                -
                
                
                680,000Common
                    stock issued for cash
                
                
                -
                
                
                355,000
                
                
                760,867147,000
                
                
                373,150
                
                
                2,007,985**NET
                    INCREASE (DECREASE) IN CASH**
                
                
                (28,299
                )
                
                24,433
                
                
                345**CASH,
                    BEGINNING OF YEAR**
                
                
                28,644
                
                
                4,211
                
                
                -**CASH,
                    END OF YEAR**
                
                
                345
                
                
                28,644
                
                
                345SUPPLEMENTAL
                    CASH FLOW INFORMATION (Note 5)
 
 The
          accompanying notes are an integral part of these financial
          statements.
  20
 
 SONA
          DEVELOPMENT CORP.
 (A
          Developmental Stage Company)
  STATEMENT
          OF STOCKHOLDERS' EQUITY
 December
          28, 1988 ( Inception) to December 31, 2006
 
 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
                )
                
                -
                
                
                5,028Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (33,798
                )
                
                (33,798
                )Balance
                    at December 31, 1998
                
                
                3,167,800
                
                
                317
                
                
                117,016
                
                
                (2,722
                )
                
                (113,856
                )
                
                705Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (66,662
                )
                
                (66,662
                )Balance
                    at December 31, 1999
                
                
                3,167,800
                
                
                317
                
                
                117,016
                
                
                (2,722
                )
                
                (180,518
                )
                
                (65,957
                )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
                
                
                -
                
                
                2,772Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,018,914
                )
                
                (1,018,914
                )Balance
                    at December 31, 2000
                
                
                6,688,292
                
                
                670
                
                
                821,680
                
                
                -
                
                
                (1,199,432
                )
                
                (377,082
                )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
                )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 forfinance
                  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
                )
   The
            accompanying notes are an integral part of these financial
            statements.
 21
 SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 Note
        1
        - Nature of Operations and Basis of Presentation
 
 (a) Organization
 
 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 for sale in the United States market and it
        was
        dormant until its reactivation in March 1997. In June 1997, the Company changed
        its name to Net Master Consultants, Inc. 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 8. 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, has a working capital deficiency of $233,127 at December 31, 2006 and
        has
        incurred losses of $3,095,229 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.
 22
 SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
  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) Foreign
        Currency Translation
 
 The
        Company considers the U.S. dollar its functional currency. Monetary assets
        and
        liabilities resulting from foreign currency transactions are translated into
        U.S. dollar equivalents using the year end conversion rates. Revenues, expenses,
        receipts and payments are translated throughout the year at exchange rates
        prevailing at the date of the transaction. Exchange gains and losses are
        included in the loss for the year.
 
 (c) 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.
 
 (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.
 
 23
 SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 Note
        2
        - Summary of Significant Accounting Policies (continued)
 
 (e) Stock-Based
        Compensation
 
 On
        January 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS
        No. 123R), Share-Based Payment, which addresses the accounting for
        stock-based payment transactions in which an enterprise receives employee
        services in exchange for (a) equity instruments of the enterprise or
        (b) liabilities that are based on the fair value of the enterprise’s equity
        instruments or that may be settled by the issuance of such equity
        instruments. In January 2005, the Securities and Exchange Commission (SEC)
        issued Staff Accounting Bulletin (SAB) No. 107, which provides
        supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R
        eliminates the ability to account for stock-based compensation transactions
        using the intrinsic value method under Accounting Principles Board (APB)
        Opinion
        No. 25, Accounting for Stock Issued to Employees, and instead generally
        requires that such transactions be accounted for using a fair-value-based
        method. The Company uses the Black-Scholes-Merton (“BSM”) option-pricing model
        to determine the fair-value of stock-based awards under SFAS No. 123R,
        consistent with that used for pro forma disclosures under SFAS No. 123,
        Accounting for Stock-Based Compensation. The Company has elected the modified
        prospective transition method as permitted by SFAS No. 123R and accordingly
        prior periods have not been restated to reflect the impact of SFAS
        No. 123R. The modified prospective transition method requires that
        stock-based compensation expense be recorded for all new and unvested stock
        options, restricted stock, restricted stock units, and employee stock purchase
        plan shares that are ultimately expected to vest as the requisite service
        is
        rendered beginning on January 1, 2006 the first day of the Company’s fiscal year
        2006. Stock-based compensation expense for awards granted prior to January
        1,
        2006 is based on the grant date fair-value as determined under the pro forma
        provisions of SFAS No. 123. As the Company did not grant any stock options
        in 2005, no pro forma information is provided.
 
 Prior
        to
        the adoption of SFAS No. 123R, the Company measured compensation expense
        for its employee stock-based compensation plans using the intrinsic value
        method
        prescribed by APB Opinion No. 25. The Company applied the disclosure
        provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for
        Stock-Based Compensation - Transition and Disclosure, as if the fair-value-based
        method had been applied in measuring compensation expense. Under APB Opinion
        No. 25, when the exercise price of the Company’s employee stock options was
        equal to the market price of the underlying stock on the date of the grant,
        no
        compensation expense was recognized.
 
 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.
 
 24
 SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 Note
        2
        - Summary of Significant Accounting Policies (continued)
 
 (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
        Accounting Pronouncements
 
 In
        February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments-an amendment of FASB Statements No. 133 and 140”, to
        simplify and make more consistent the accounting for certain financial
        instruments. SFAS No. 155 amends SFAS No. 133, “Accounting for Derivative
        Instruments and Hedging Activities”, to permit fair value remeasurement for any
        hybrid financial instrument with an embedded derivative that otherwise would
        require bifurcation, provided that the whole instrument is accounted for
        on a
        fair value basis. SFAS No. 155 amends SFAS No. 140, “Accounting for the
        Impairment or Disposal of Long-Lived Assets”, to allow a qualifying
        special-purpose entity
        to
        hold a derivative financial instrument that pertains to a beneficial interest
        other than another derivative financial instrument. SFAS No. 155 applies
        to all
        financial instruments acquired or issued after the beginning of an entity's
        first fiscal year that begins after September 15, 2006, with earlier application
        allowed. This standard is not expected to have a significant effect on the
        Company’s future reported financial position or results of
        operations.
 
 In
        March
        2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
        Assets, an amendment of FASB Statement No. 140, Accounting for Transfers
        and
        Servicing of Financial Assets and Extinguishments of Liabilities". This
        statement requires all separately recognized servicing assets and servicing
        liabilities be initially measured at fair value, if practicable, and permits
        for
        subsequent measurement using either fair value measurement with changes in
        fair
        value reflected in earnings or the amortization and impairment requirements
        of
        Statement No. 140. The subsequent measurement of separately recognized servicing
        assets and servicing liabilities at fair value eliminates the necessity for
        entities that manage the risks inherent in servicing assets and servicing
        liabilities with derivatives to qualify for hedge accounting treatment and
        eliminates the characterization of declines in fair value as impairments
        or
        direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
        year
        beginning after September 15, 2006. This adoption of this statement is not
        expected to have a significant effect on the Company’s future reported financial
        position or results of operations.
 
 25
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 
 Note
        2
        - Summary of Significant Accounting Policies (continued)
 
 (g) Recent
        Accounting Pronouncements (continued)
 
 In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans.” This Statement requires an
        employer to recognize the over funded or under funded status of a defined
        benefit post retirement plan (other than a multiemployer plan) as an asset
        or
        liability in its statement of financial position, and to recognize changes
        in
        that funded status in the year in which the changes occur through comprehensive
        income.  SFAS No. 158 is effective for fiscal years ending after December
        15, 2006. The Company does not expect that the implementation of SFAS No.
        158
        will have any material impact on its financial position and results of
        operations.
 
 In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measures”.
        This Statement defines fair value, establishes a framework for measuring
        fair
        value in generally accepted accounting principles (GAAP), expands disclosures
        about fair value measurements, and applies under other accounting pronouncements
        that require or permit fair value measurements. SFAS No. 157 does not
        require any new fair value measurements. However, the FASB anticipates that
        for
        some entities, the application of SFAS No. 157 will change current
        practice. SFAS No. 157 is effective for financial statements issued for fiscal
        years beginning after November 15, 2007, which for the Company would be the
        fiscal year beginning January 1, 2008. The Company is currently evaluating
        the
        impact of SFAS No. 157 but does not expect that it will have a
        material impact on its financial statements.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin
        (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements
        when Quantifying Misstatements in Current Year Financial Statements.” SAB
        No. 108 addresses how the effects of prior year uncorrected misstatements
        should be considered when quantifying misstatements in current year financial
        statements. SAB No. 108 requires companies to quantify misstatements using
        a balance sheet and income statement approach and to evaluate whether either
        approach results in quantifying an error that is material in light of relevant
        quantitative and qualitative factors. SAB No. 108 is effective for periods
        ending after November 15, 2006. The Company is currently evaluating the
        impact of adopting SAB No. 108 but does not expect that it will have a
        material effect on its financial statements.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities”. This Statement permits entities to
        choose to measure many financial assets and financial liabilities at fair
        value.
        Unrealized gains and losses on items for which the fair value option has
        been
        elected are reported in earnings. SFAS No. 159 is effective for fiscal years
        beginning after November 15, 2007. The Company is currently assessing the
        impact of SFAS No. 159 on its financial position and results of
        operations.
 
 26
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 Note
        3
        - Due to Related Parties
 
 Related
        party payables consist of the following:
  December
                    31,2006
                
                2005Due
                    to a significant shareholder (a)
                
                $
                199,572
                
                $
                11,691Unsecured
                    payable to a shareholder with no specific
                  terms
                    and due on demand (b)
                
                
                16,000
                
                
                5,000$
                215,572
                
                $
                16,691
 
 The
        following represents related party transactions paid or accrued during the
        years
        ended December 31, 2006 and 2005.
  2006
                
                2005Consulting
                    fees paid or accrued to a director (c)
                
                $
                110,500
                
                $
                72,949Consulting
                    fees paid or accrued to a significant shareholder (a)
                
                
                60,900
                
                
                42,000Rent
                    paid or accrued to a shareholder (b)
                
                
                12,000
                
                
                8,000$
                183,400
                
                $
                122,949
  The
        above
        transactions are in the normal course of operation and are measured at the
        exchange amount, which is the amount of consideration established and agreed
        to
        by the related parties. Refer to Note 7.
 
 (a)  The
        amounts due to related parties at December 31, 2006 of $199,572 significant
        (2005 - $11,691) 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 $147,000 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, 2006, the Company had accrued $8,526 of interest
        on the
        loans. The loans are unsecured and due on demand. The Company has also issued
        450,000 restricted common shares to the lender as additional consideration
        for
        the loans. These shares were valued at $187,500. If the loan is not paid
        in full
        from the proceeds of the Company’s next financing, the lender will also be
        entitled to a one-time late charge equal to 2% of the outstanding principal
        amount of the loan. Overdue payments will bear interest at 12% per annum
        until
        paid.
  At
        December 31, 2006, the Company was also indebted $44,046 to this significant
        shareholder for consulting fees and reimbursable expenses. This additional
        debt
        bears no interest and has no set term of repayment. (Refer to Note
        9)
 
 27
  SONA
          DEVELOPMENT CORP.
 (A
          Development Stage Company)
 NOTES
          TO
          THE FINANCIAL STATEMENTS
 DECEMBER
          31, 2006 AND 2005
 
 Note
        3
        - Due to Related Parties (continued)
 
 On
          May 30, 2006, the Company issued 126,000 shares of
          common stock in settlement of $50,400 of consulting fees due to this significant
          shareholder.
  (b)  In
        May of
        2005, the Company entered into an agreement with a shareholder for office
        rent
        and expenses at $1,000 per month.
 
 (c)  On
        December 1, 1999, the Company entered into a consulting agreement with the
        Company’s sole officer and director. The agreement has an automatic renewal
        provision unless terminated by either party. In fiscal 2006, the Company
        incurred $110,500 (2005 - $72,949) in consulting fees to this director, of
        which
        $56,000 was paid by issuance of common stock.
 
 (d)  See
        Note
        5 for additional related party transactions.
 
 Note
        4
        - Income Taxes
 
 The
        Company accounts for its income taxes in accordance with FASB No. 109,
“Accounting for Income Taxes.” As of December 31, 2006, 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
        carryforwards.
 
 Note
        5
        - 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.
 
 (b) Stock
        issuances
 
 On
        September 15, 2006, the Company issued 300,000 shares of common stock with
        a
        fair value of $135,000 to a shareholder as partial consideration for bridge
        financing.
 
 On
        May
        30, 2006, the Company issued 126,000 shares of common stock with a fair
        value of $31,500 to a shareholder for consulting fees.
  On
        May
        30, 2006, the Company issued 50,000 shares of common stock with a fair value
        of
        $20,000 to a director for consulting fees.
  28
 
  SONA
            DEVELOPMENT CORP.
 (A
            Development Stage Company)
 NOTES
            TO
            THE FINANCIAL STATEMENTS
 DECEMBER
            31, 2006 AND 2005
  On
        May 8,
        2006, the Company issued 100,000 shares of common stock with a fair value
        of
        $36,000 to a director for consulting fees.
 
 Note
        5
        - Capital Stock (continued)
 
 (b) Stock
        issuances (continued)
 
 On
        February 17, 2006, the Company issued 150,000 shares of common stock with
        a fair
        value of $52,500 to a shareholder as partial consideration for $50,000 in
        bridge
        financing from the shareholder.
 
 On
        December 15, 2005, the Company issued 50,000 shares of common stock with
        a fair
        value of $25,000 to a director for consulting fees.
 
 On
        October 19, 2005, the Company issued 1,025,680 shares of common stock in
        settlement of $102,568 of debt.
 
 During
        2005, the Company issued 914,288 shares of its common stock at $0.35 per
        share
        for proceeds of $320,000.
 
 On
        April
        5, 2005, 122,000 shares of common stock were issued to a significant shareholder
        in settlement of $12,200 of debt.
 
 Note
        6
        - Supplemental Cash Flow Information
 
 Actual
        amounts paid for interest and income taxes for 2006 and 2005 are as follows:
  2006
                
                2005Interest
                
                $
                -
                
                $
                -Income
                    taxes
                
                
                -
                
                
                -
 During
        the year ended December 31, 2006, the Company issued:
 
 (a)
        126,000 shares of common stock with a fair value of $31,500 to a shareholder
        for
        consulting fees.
 
 (b)
        150,000 shares of common stock with a fair value of $56,000 to a director
        for
        consulting fees.
 
 (c)
        450,000 shares of common stock with a fair value of $187,500 to a shareholder
        as
        partial consideration for bridge financing.
 
 During
        the year ended December 31, 2005, the Company issued:
  29
 
  SONA
            DEVELOPMENT CORP.
 (A
            Development Stage Company)
 NOTES
            TO
            THE FINANCIAL STATEMENTS
 DECEMBER
            31, 2006 AND 2005
 (a)
        1,147,680 common stock for settlement of $114,768 of debt.
 
 (b)
        50,000 common stock for consulting services valued at $25,000.
 
 Note
        7
        - Investment
 
 **Proposed
        Idea One Merger**
 On
        May
        20, 2004, as amended November 1 and 19, 2004, December 28, 2004, March 22,
        2005,
        April 22, 2005, July 15, 2005, and November 14, 2005, the Company entered
        into a
        letter of intent, to merge with Idea One, 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. Interest of $2,046 was accrued on these notes during
        2004 however the Company did not continue to accrue interest beyond
        December 31, 2004, and the notes were written down to $1 as of
        December 31, 2005 because management determined they were not
        collectible.
 
 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, these shares
        are recorded at $1.
 
 Note
        8
        - Proposed Merger with Sibling
 
 On
        June
        28, 2006 as amended December 15, 2006, the Company executed a definitive
        agreement of acquisition and plan of reorganization (the "Agreement") with
        Sibling Entertainment Group, Inc. ("Sibling"), an entertainment development
        and
        production company based in New York City. Under the terms of the Agreement,
        which is subject to shareholder approval, the Company is to acquire each
        of
        Sibling's four wholly owned subsidiaries: Sibling Theatricals, Inc., Sibling
        Pictures, Inc., Sibling Music Corp., Sibling Properties, Inc. 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
        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.
 On
          February 9, 2007, the expected closing date of the Agreement, the shareholders
          approved the Agreement and name change. The closing of the Agreement
          remains subject to the applicable registration requirements of the Securities
          Exchanges Act of 1934, as amended, specifically the filing and effectiveness
          of
          an S-4 registration statement to be filed with the SEC. Based upon the
          requirement to file an S-4 registration statement, the Company may change
          the
          structure of the transaction with Sibling.
  30
 
  SONA
            DEVELOPMENT CORP.
 (A
            Development Stage Company)
 NOTES
            TO
            THE FINANCIAL STATEMENTS
 DECEMBER
            31, 2006 AND 2005
 
 Note
        9 -
        Subsequent Events
  Subsequent
        to year-end, the Company issued 1,097,361 shares to a significant shareholder
        in
        settlement of an outstanding balance of $219,472 for cash loans, accrued
        interest, reimbursable expenses and consulting fees. The amount of $199,572
        was
        due to this shareholder at December 31, 2006 (Note 3a). The balance due to
        this
        shareholder increased in 2007 for cash loans of $16,400 and consulting fees
        of
        $3,500.
  **ITEM
        8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE**
  The
        Company has had no changes in or disagreements with its accountants as to
        accounting or financial disclosure over the two most recent fiscal years.
  **ITEM
        8A.           CONTROLS AND
        PROCEDURES**
  The
        Company’s President acts both as the Company’s chief executive officer and chief
        financial officer and is responsible for establishing and maintaining disclosure
        controls and procedures for the Company.
  (a)
        Evaluation of Disclosure Controls and Procedures
  Under
        the
        supervision and with the participation of our management, including our
        principal executive officer and principal financial officer, we evaluated
        the
        effectiveness of the design and operation of our disclosure controls and
        procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
        Act,
        as of December 31, 2006. Based on this evaluation, our principal executive
        officer and our principal financial officer concluded that, as of the end
        of the
        period covered by this report, our disclosure controls and procedures were
        effective and adequately designed to ensure that the information required
        to be
        disclosed by us in the reports we submit under the Exchange Act is recorded,
        processed, summarized and reported within the time periods specified in the
        applicable rules and forms and that such information was accumulated and
        communicated to our chief executive officer and chief financial officer,
        in a
        manner that allowed for timely decisions regarding disclosure.
  31
  (b)
        Changes in Internal Controls
  During
        the period ended December 31, 2006, there has been no change in internal
        control
        over financial reporting that has materially affected, or is reasonably likely
        to materially affect our internal control over financial reporting.
  The
        Company’s management, including the chief executive officer and chief financial
        officer, does not expect that its disclosure controls or internal controls
        will
        prevent all error 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. In addition, the design of a control
        system must reflect the fact that there are resource constraints, and the
        benefits of controls must be considered relative to their costs. Because
        of the
        inherent limitations in all control systems, no evaluation of controls can
        provide absolute assurance that all control issues and instances of fraud,
        if
        any, within a company have been detected. These inherent limitations include
        the
        realities that judgments in decision-making can be faulty, and that breakdowns
        can occur because of simple error or mistake.
  Additionally,
        controls can be circumvented by the individual acts of some persons, by
        collusion of two or more people or by management’s override of the control. The
        design of any systems of controls is based in part upon certain assumptions
        about the likelihood of future events, and there can be no assurance that
        any
        design will succeed in achieving its stated goals under all potential future
        conditions. Over time, control may become inadequate because of changes in
        conditions, or the degree of compliance with the policies or procedures may
        deteriorate. Because of these inherent limitations in a cost-effective control
        system, misstatements due to error or fraud may occur and not be detected.
  Individual
        persons perform multiple tasks which normally would be allocated to separate
        persons and therefore extra diligence must be exercised during the period
        these
        tasks are combined. It is also recognized the Company has not designated
        an
        audit committee and no member of the board of directors has been designated
        or
        qualifies as a financial expert. The Company should address these concerns
        at
        the earliest possible opportunity.
  **ITEM
        8B.           OTHER
        INFORMATION**
  None.
  32
  **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)**Nora
                  Coccaro
              50
              Chief
                  Executive Officer, ChiefFinancial
                  Officer, PrincipalAccounting
                  Officer and Director
  Nora
        Coccaro was appointed to the Company’s Board of Directors on January 15, 2000
        and currently serves as the Company’s sole director and executive officer. Ms.
        Coccaro will serve as a director until the next annual meeting of the Company’s
        shareholders or until such time as a successor is elected and qualified.
  Ms. Coccaro
        attended medical school at the University of Uruguay before becoming involved
        in
        the management of public entities. Ms. Coccaro serves as (a) an officer and
        director (December 2005 to present) of Newtech Resources, Inc., an OTC:BB
        quoted
        company without operations, (b) an officer and director (February 2004 to
        present) of Solar Energy Limited an OTC: BB quoted company involved in the
        development of alternative sources of energy, (c) an officer and director
        (April
        1999 to present) of Healthbridge, Inc., an OTC: BB quoted company previously
        involved in manufacturing and marketing of medical waste sterilization and
        disposal technologies, and (d) an officer (October 2003 to present) and a
        director (October 2003 to November 2003) of ASP Ventures Corp., an OTC: BB
        quoted company without current operations. Ms. Coccaro has also served as
        (a) an
        officer and director (February 2000 to January 2004) of OpenLimit, Inc.,
        an OTC:
        BB quoted company involved in credit card encryption technology, (b) a director
        (1998 until May 1999) of Americana Gold & Diamond Holdings, Inc., an OTC: BB
        quoted company without current operations, and (c) an officer and director
        (1997
        until 1999) of Black Swan Gold Mines, a Toronto Senior Listing company with
        diamond exploration activities in Brazil. Since September 1998 Ms. Coccaro
        has
        also acted as the Consul of Uruguay to Western Canada.
  **Compensation
        of Directors**
  The
        Company’s director is not currently compensated for her service as a director 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.
  33
  **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 has incorporated its Code of Ethics as Exhibit 14
        to this
        Form 10-KSB. 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, 2006, 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
        except the following:
   -
              Previously
                Nora Corraco
                failed to file a Form 4 and Form 5 in a timely manner despite being
                an
                officer and director of the Company. Ms. Coccaro's filings are now
                current.-
              Michael
                  Baybak failed to file a Form 4 and Form 5 in a timely manner despite
                  being
                  the beneficial owner of more than ten percent of the common stock
                  of the
                  Company. Mr. Baybak’s filings are now current.
  **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 2006,
        2005,
        and 2004. 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.
  34
 
  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,
                    
                    
                    2006
                    
                    $
                    54,500
                    
                    
                    -
                    
                    
                    -
                    
                    $
                    56,000
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -chief
                        executive
                    
                    
                    2005
                    
                    
                    47,949
                    
                    
                    -
                    
                    
                    -
                    
                    
                    5,000
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -and
                        financial
                    
                    
                    2004
                    
                    
                    35,755
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -officer,
                        anddirector
 **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 April 2, 2007, 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 April 2, 2007, 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
                  
                  200,000
                  
                  1.53%Chief
                      Executive and Financial Officer, and Director1066-2610
                      West Hastings Street, Vancouver, BritishColumbia
                      Canada V6E 2K3Common
                  
                  Michael
                      Baybak
                  
                  4,162,037
                  
                  31.23%305-4515
                      Ocean View BoulevardLa
                      Canada, California 91011All
                      executive officers and directors as a group(1)
                  
                  200,000
                  
                  1.53%
 
 **ITEM
          12.           CERTAIN
          RELATIONSHIPS AND RELATED TRANSACTIONS**
  On
          September 15, 2006, the Company issued 300,000 shares of common stock with
          a
          fair value of $135,000 to a shareholder as a partial consideration for
          bridge
          financing from the shareholder.
  35
 
 On
        May
        30, 2006, the Company issued 126,000 shares of common stock in settlement
        of
        $31,500 of debt.
 
 On
        May
        30, 2006, the Company issued 50,000 shares of common stock with a fair value
        of
        $20,000 to a director for consulting fees.
 
 On
        May 8,
        2006, the Company issued 100,000 shares of common stock with a fair value
        of
        $36,000 to a director for consulting fees.
  On
        February 17, 2006, the Company issued 150,000 shares of its common stock
        in lieu
        of a cash payment for services rendered by Michael Baybak, a shareholder
        holding
        in excess of ten percent (10%) of the Company’s common stock, and expenses
        incurred on behalf of the Company in the amount of $52,500.
  On
        December 15, 2005, the Company issued 50,000 shares of common stock with
        a fair
        value of $25,000 to a director for consulting fees.
 
 On
        October 19, 2005, the Company issued 1,025,680 shares of common stock in
        settlement of $102,568 of debt.
 
 During
        2005, the Company issued 914,288 shares of its common stock at $0.35 per
        share
        for proceeds of $320,000.
 
 On
        April
        05, 2005, 122,000 shares of common stock were issued to a significant
        shareholder in settlement of $12,200 of debt.
 
 The
        amounts due to related parties at December 31, 2006 of $199,572 (2005 - $11,691)
        are due to a significant shareholder for cash loans, consulting fees and
        reimbursable expenses. The Company is indebted to this shareholder for cash
        loans of $147,000 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,
        2006, the Company had accrued $8,526 of interest on the loans. The loans
        are
        unsecured and due on demand. The Company has also issued 450,000 restricted
        common shares to the lender as additional consideration for the loans. These
        shares were valued at $187,500. If the Note is not paid in full from the
        proceeds of the Company’s next financing, the lender will also be entitled to a
        one-time late charge equal to 2% of the outstanding principal amount of the
        Note. Overdue payments will bear interest at 12% per annum until paid.
 
 At
        December 31, 2006, the Company was also indebted $44,046 to this shareholder
        for
        consulting fees and reimbursable expenses. This additional debt bears no
        interest and has no set term of repayment.
 
 On
        May
        30, 2006, the Company issued 126,000 shares of common stock in settlement
        of
        $50,400 of consulting fees due to a significant shareholder.
  36
  On
        December 1, 1999, the Company entered into a consulting agreement with the
        Company’s sole officer and director. The agreement has an automatic renewal
        provision unless terminated by either party. In fiscal 2006, the Company
        incurred $110,500 (2005 - $72,949) in consulting fees to this director, of
        which
        $56,000 was paid by issuance of common stock.
  **ITEM
        13.          
EXHIBITS**
  Exhibits
        required by Item 601 of Regulation S-B are listed in the Index to Exhibits
        beginning on page 23 of this Form 10-KSB, which is incorporated herein by
        reference.
  **ITEM
        14.           PRINCIPAL
        ACCOUNTANT FEES AND SERVICES**
  Audit
        Fees
  Dale
        Matheson Carr-Hilton LaBonte, LLP provided audit services to the Company in
        connection with its annual report for the fiscal years ended December 31,
        2006
        and 2005. The aggregate fees billed by Dale Matheson Carr-Hilton LaBonte,
        LLP
        for the audit of the Company’s annual financial statements and a review of the
        Company’s quarterly financial statements was approximately $39,900 and
        $18,700 respectively.
  Audit
        Related Fees
  Dale
        Matheson Carr-Hilton LaBonte, LLP billed to the Company no fees in 2006 or
        2005
        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.
  Tax
        Fees
  Dale
        Matheson Carr-Hilton LaBonte, LLP billed to the Company no fees in 2006 or
        2005
        for professional tax services rendered.
  All
        Other Fees
  Dale
        Matheson Carr-Hilton LaBonte, LLP billed to the Company no fees in 2006 or
        2005
        for other professional services rendered or any other services not disclosed
        above.
  Audit
        Committee Pre-Approval
  The
        Company does not have a standing audit committee. Therefore, all services
        provided to the Company by Dale Matheson Carr-Hilton LaBonte, LLP as detailed
        above were pre-approved by the Company’s board of directors. The Company’s
        independent auditor, Dale Matheson Carr-Hilton LaBonte, LLP, performed all
        work
        using only their own full time permanent employees.
  37
  **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 2 nd day of
        April, 2007.
  **Sona
                Development Corp.**/s/
                  Nora CoccaroNora
                Coccaro,Chief
                  Executive Officer, Chief Financial
                Officerand
                  Principal Accounting Officer
  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/
                    Nora Coccaro
                Chief
                    Executive Officer,
                April
                    2, 2007Nora
                    Coccaro
                Chief
                    Financial Officer,Principal
                    Accounting Officer and Director/s/ Mitchell
                    Maxwell
                Director
                April
                    2, 2007Mitchell
                  Maxwell/s/ Victoria
                  Maxwell
                Director
                April
                    2, 2007Victoria Maxwell/s/
                  James
                  Cardwell
                Director
                April
                    2, 2007James
                  Cardwell/s/
                  Richard
                  Bernstein
                Director
                April
                    2, 2007Richard
                  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
              Attached
              Certification
                  of the Chief Executive Officer and 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
              Attached
              Certification
                  of the Chief Executive Officer and 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 10KSB filed with the Commission on
        April
        3, 2003.
  ***
        Incorporated by reference from the Form 10KSB filed with the Commission on
        March
        30, 2004.
  39