UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




Washington, D.C.
20549




FORM
10-K




þ ANNUAL REPORT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the fiscal year
ended February 28,
2009




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




For the transition
period from ___________ to ___________.




Commission file
number 000-34297




SOUND
REVOLUTION INC.


(Exact name of
registrant as specified in its charter)




DELAWARE
            N/A(State
      or Other Jurisdiction of Incorporation of Organization)
            (I.R.S.
      Employer Identification No.)





925 West Georgia
      Street, Suite 1820
              Vancouver, British
      Columbia
              Canada V6C
      3L2
              (Address
      of principal executive offices)




604.632.1700


(Registrant’s
telephone number, including area code)




Securities registered under Section
12(b) of the Exchange Act: None


Securities registered under Section
12(g) of the Exchange Act: Common
Stock, $0.001 par value




Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes oNo
þ
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yesþ   No
o




Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
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 þ   No
o
 
 Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(§ 229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. þ
 
 Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definition of
“large accelerated filer and “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large accelerated
filer o     Accelerated
filer o      Non-accelerated
filer o     Smaller reporting company þ
 
 Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act)  Yes o   No þ




Aggregate market
value of the voting and non-voting stock held by non-affiliates of the
registrant as of August
29, 2008:$107,118(Holdings of 71,412 common shares calculated at $1.50 per share
as of the last sale before August 29, 2008).




As
of May
27, 2009the registrant’s outstanding stock consisted of 96,213,567common
shares.







SOUND
REVOLUTION INC.




TABLE
OF CONTENTS




PART IItem 1. Description of
      Business
              2Item 1A. Risk Factors
              20Item 1B. Unresolved Staff
      Comments
              20Item 2. Properties
              20Item 3. Legal
Proceedings
              20Item 4. Submission of Matters to a
      Vote of Security Holders
              20PART IIItem 5. Market for Registrant’s
      Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities.
              21Item 6.  Selected Financial
      Data
              22Item 7.  Management’s Discussion and Analysis
      of Financial Condition and Results of Operation
              22Item 7A.  Quantitative and
      Qualitative Disclosures about Market Risk
              25Item 8. Financial Statements and
      Supplementary Data
              26Item 9.  Changes In and
      Disagreements with Accountants on Accounting and Financial
      Disclosure
              27Item 9A.  Controls and
      Procedures
              27Item 9B.  Other
      Information
              28PART IIIItem 10. Directors, Executive Officers
      and Corporate Governance.
              29Item 11. Executive
      Compensation.
              32Item 12.  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
              33Item 13. Certain Relationships and
      Related Transactions, and Director Independence
              34Item 14. Principal Accounting Fees
      and Services
              34Part IV
              35Item 15.  Exhibits, Financial Statement
      Schedules
              36







1




PART I





Item 1.    Description of
Business




Forward-looking
Statements




This annual report
contains forward-looking statements. These statements relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking
statements.




Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable laws, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements so as to conform these statements to actual results.




As
used in this annual report, the terms "we", "us", "our", “the Company”, and
"Sound Revolution" means Sound Revolution Inc., unless otherwise
indicated.  In addition to our existing business, we have assumed the
business of On4 Communications, Inc., an Arizona company (“On4”) with which we
recently merged.  All references to On4’s business and products,
though they refer to our business, are so described in order to distinguish our
existing business from our newly assumed business.




All dollar amounts
refer to US dollars unless otherwise indicated.




Corporate
History




Sound Revolution
Inc. was incorporated on June 4, 2001 under the laws of the State of
Delaware.  On May 1, 2009, we merged with On4 Communications
Ltd., an Arizona corporation incorporated on June 5, 2006.  Our
principal offices are located at Suite 1820 925 W. Georgia Street, Vancouver,
BC, V6C 3L2, and our telephone number is (604) 728-2522. We have three
wholly-owned subsidiaries: (i) Sound Revolution Recordings, Inc., which was
incorporated in British Columbia, Canada on June 20, 2001, for the purpose of
carrying on music marketing services in British Columbia; (ii) Charity Tunes,
Inc. (“Charity Tunes”), which was incorporated in the State of Delaware on June
27, 2005 for the purpose of operating a website for the distribution of music
online; and (iii) PetsMobility Inc., which was incorporated in the state of
Delaware on March 23, 2006 for the purposes operating the website www.petsmo.com
and related business.




Business
Development




We
are in the development stage and have not generated significant revenues from
our business activities. As at February 28, 2009, we have a working capital
deficit of $603,564, and have incurred an accumulated deficit since inception of
$952,309.  Furthermore, during the year ended February 28, 2009, we
recorded sales revenue of $136, but had a gross loss of $110.


We
have not generated significant revenues from the sale of music through our
online digital music retail website, www.charitytunes.com.  We
continue to seek new sales, marketing and co-branding opportunities to increase
the sales revenues of www.charitytunes.com.  To that end, we are
presently in negotiations with a leading branded foods company with whom we
intend to launch a North-America wide promotional co-branding campaign whereby
the food company will purchase and distribute www.charitytunes.com music
download vouchers will be distributed with certain popular branded food
products.  However, there is no guarantee that we will be successful
in finalizing any agreement.





2




Through our
subsidiary, Charity Tunes Inc., we have been developing products, services and
internet utilities for the digital distribution of music and other entertainment
media.  On April 7, 2009 we entered into merger agreement with On4
Communications, Inc., an Arizona corporation carrying on business the field of
location-based-services and products.  Pursuant to the merger
agreement, described below, we merged with On4 Communications, Inc. on May 1,
2009.





The following is a
summary of material events in the development of our business during the last
fiscal year:




On
April 7, 2008 Garry Newman resigned as our director and was appointed as a
Director of our wholly owned subsidiary Charity Tunes Inc. On April 5, 2008
Susanne Milka resigned as our Director.




On
January 3, 2008, our wholly owned subsidiary Charity Tunes entered into an
Agency and Promotion Agreement with World Wildlife Fund Canada (“WWF-Canada”) in
order to raise funding and awareness to WWF-Canada’s cause through the
participation in promotion programs with Charity Tunes.  We will
collect an amount equal to a minimum of 10% of the purchase price of a song or
other digital content or products sold on our website for which purchasers
select WWF-Canada as the recipient of the donation. Donations collected will be
forwarded to WWF-Canada every calendar quarter if donations owed by Charity
Tunes are at least $100.





On
June 10, 2008, we completed a reverse stock split on the basis of one new share
of common stock in exchange for every forty-two old shares of common stock
outstanding. All per share amounts were been retroactively restated to reflect
the reverse stock split. We concurrently increased our authorized capital from
100,000,000 to 110,000,000 shares of which 100,000,000 shares of the total
authorized capital are common stock and 10,000,000 shares are preferred
stock.  On June 26, 2008, the reverse stock split and the increase in
our authorized capital came into effect.  As a result of the reverse
stock split, the number of the outstanding shares of our common stock was
decreased from 10,854,629 shares to 258,444 shares of common stock




On
September 8, 2008, Robin Ram resigned as our President, Chief Executive Officer
and Director.  We concurrently appointed Penny Green to succeed Mr.
Ram as our President and Chief Executive Officer.




On
September 14, 2008 Penny Green resigned as a Director and as our President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Secretary and Treasurer.




Effective September
15, 2008, Catherine LeBlanc succeeded Ms. Green as our sole Director, President,
Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Secretary and Treasurer.




3




On
February 9, 2009 Catherine LeBlanc resigned as the President, Chief Executive
Officer, Chief Financial Officer, Principal Accounting Officer, Secretary and
Treasurer of Sound Revolution.  Ms. LeBlanc continues to serve as a
director on our Board of Directors.





Also on February 9,
2009 we appointed Penny Green to succeed Ms. LeBlanc as our President, Chief
Executive Officer, Chief Financial Officer, Principal Accounting Officer,
Secretary and Treasurer.  Ms. Green was concurrently appointed as a
director on our Board of Directors, thereby increasing the number of directors
on our Board of Directors to two.





On
March 12, 2009, we entered into a merger agreement (the “Merger Agreement”) with
On4 Communications, Inc.  (“On4 Communications”) an Arizona
incorporated company in the business manufacturing two-way communication and
location devices with applications that include tracking people, pets, assets,
and inventory, among others.  Our Board of Directors considered the
merger to be consistent with the furtherance of our long-term business strategy
and in the best interest of the shareholders.





On
April 7, 2009, we entered into a second merger agreement with On4 Communications
in order to amend certain material terms of the original merger agreement
entered into on March 12, 2009.  The material terms of the amended
agreement, which replaces the original agreement in its entirety, are as
follows:





Prior to the Merger
Closing:




·
              Both parties
      will submit the merger to a vote of their shareholders and obtain approval
      from holders of a majority of both parties’ respective voting
      shares.·
              We will enter
      into a Convertible Note in the amount of US$120,000 with Penny Green, our
      majority shareholder, Director and sole officer, which shall be due in
      seven months, convertible into common stock at US$0.10 at the option of
      Ms. Green, and reducible to US$100,000 if On4 Communications incurs legal
      fees in excess of US$10,000 in connection with the
  Merger.·
              We will
      convert debt owed to Penny Green and Bacchus Entertainment Ltd., a company
      owned and controlled by Ms. Green into 35,000,000 shares of our common
      stock at a price of $0.001 per share (the “Control
    Shares”).·
              We will have
      transferred all of our assets and debts, other than the Note and any debt
      owing to Penny Green or Bacchus Entertainment Ltd., to our wholly owned
      subsidiary, Charity Tunes Inc.·
              We will not
      have issued any securities other than the Note and the Control Shares,
      unless such issuance had been approved in writing by On4
      Communications.


Upon the Merger
Closing, the following shall apply to the surviving entity of the
merger:




·
            It will adopt
      the articles and bylaws of Sound Revolution, and the name of the surviving
      entity shall be Sound Revolution Inc.·
            The Directors
      will be Cameron Robb, Penny Green and Catherine Leblanc.Cameron Robb
      will be the CEO.




4






Additionally, upon
the Merger Closing:




·
            The surviving
      entity will raise a minimum of US$150,000 through a direct offering of
      units registered on a Form S-1 Prospectus at a price to be determined by
      the surviving entity, with each unit comprised of one common share and one
      half warrant to purchase one common share at a price of US$1.00 for a
      period of 12 months (the “Units”).·
            All notes
      payable by On4 Communications in excess of US$100,000 will be converted to
      equity at a price to be mutually agreed upon by On4 Communications and the
      specific creditor or receive a repayment extension of no less than six
      months and with an annual interest rate not to exceed
  12%.





After Raising a
Minimum of $150,000:




·
            $150,000 will
      be repaid to Penny Green towards the outstanding loans owed to her, or to
      companies controlled by her. Upon receipt of the $150,000
      payment:o
            Charity Tunes
      Inc. (along with all current assets and contracts of Sound Revolution)
      will be sold to Bacchus Filings Inc., a company controlled by Penny Green,
      in consideration for which Bacchus Filings Inc. shall assume the entire
      amount of loan owing to Penny Green or Bacchus Entertainment Ltd.,
      exclusive of the Convertible Note;o
            The surviving
      entity will change its name to On4 Communications,
  Inc.;o
            Penny Green,
      and all companies controlled by Penny Green, will cancel all but 236,066
      of the shares of the surviving entity owned by them;o
            Penny Green
      and Catherine LeBlanc shall resign as Directors, and Gordon Jessup will be
      appointed as a director; ando
            Other than
      the Convertible Note, all debts of the surviving entity shall be
      extinguished.




As of
May 1, 2009 we completed the merger closing and have incorporated the business
of the former On4 Communications Inc. into our existing business.





Additionally, and
pursuant to the terms of the Merger Agreement, on May 1, 2009 we appointed
Cameron Robb as a director of Sound Revolution, increasing the number of
directors sitting on our Board of Directors to three. Prior to the merger, Mr.
Robb was a director and the President and Chief Executive Officer of On4
Communications Inc.




Our
Products and Services





Charitytunes.com




Through our wholly
owned subsidiary Charity Tunes Inc. we have developed a website,
www.charitytunes.com, through which we sell digital music downloads over the
Internet.  www.charitytunes.com allows customers to choose from a
selection of charities with whom we have partnered and who receive a percentage
of the purchase price of the songs being purchased.




5




Charity
Tunes’ Distribution Methods




Charity Tunes
distributes our digital music through an online electronic content delivery and
management platform developed by us. We own the copyright in the delivery and
management platform, which also incorporates customary third party software,
such as Microsoft’s Windows Media Digital Rights Management, which protects and
securely delivers content for playback on computers, portable devices, and
network devices. Our delivery and management platform has the capacity to handle
millions of products, as well as to collect, organize and report information for
accounting, marketing and promotional purposes. Key features of the platform
include:




·
            A web service
      application programming interface to facilitate the seamless integration
      of songs with third party web sites




·
            Gift
      functionality




·
            The capacity
      to track affiliate royalty payments on a per-product
  basis




·
            Automated
      sales reports to track of affiliate
commissions




·
            Logins for
      charities and record labels (or other content owners) to track hits,
      views, preview plays, sales, royalties and
  donations




·
            Automated
      generation of various “top 10” style lists for songs or other
      products




·
            Capacity to
      sell digital content by individual song unit, by album,or in pre-set
      packages (in development)




·
            Embedded
      Flash music player allowing users to preview songs without an external
      player




·
            Scalable
      capacity to accommodate millions of products, charities and other
      affiliates




·
            Automated
      content updates and user-friendly content management
  system




·
            Customizable
      search features linked to a content management database (available with or
      without content)




·
            Customizable
      support for co-branding, localized and white-labeled sites with a shared
      product database




We
intend to divest our interest in our wholly owned subsidiary consistent with the
terms of the Merger Agreement between us and On4 Communications, Inc. dated
April 7, 2009.  According to the Merger Agreement, if we successfully
raise $150,000, those proceeds must be paid to Penny Green, our director and
sole office.  Upon receipt of the $150,000 by Ms. Green, Bacchus
Filings Inc. a company controlled by Ms. Green, shall be entitled to purchase
Charity Tunes, Inc. (including all of its assets and contracts) in consideration
for which Bacchus Filings Inc. must assume indebtedness in the amount of
approximately $500,000 owed by us to Ms. Green and to Bacchus Entertainment
Ltd., a company controlled by Ms. Green.  The assumed indebtedness
that must form part of the consideration payable by Ms. Green in respect of the
transaction excludes a Convertible Note in the amount of US$120,000 payable by
us to Ms. Green.  The terms of the Convertible Note are described
above under the section entitled “Business Development”.




Charity
Tunes Competition




We
currently have no share in the market for the online retail of music in
electronic format.  Our online music business faces competition from
traditional retail music distributors such as Virgin Megastore as well as other
online retailers such as Amazon.com who sell music in physical formats such as
compact disc, digital video disc, Blue-ray disc and, to a lesser extent, vinyl
records. These retailers may include regional, national and international retail
music chains with physical stores, deep-discount retailers, mass merchandisers,
consumer electronics outlets, mail order record clubs, small independent
operators, and online based music distributors of compact discs, digital video
discs and other physical music media.  Many of these competitors have
greater financial and other resources than we do. To the extent that consumers
choose to purchase media in traditional, non-electronic formats, our potential
sales and profits will be reduced.




6




Our online music
services competitors include www.rhapsody.com (a property of RealNetworks,
Inc.); Apple Computer's iTunes Music Store; and numerous other online efforts,
including those of leading media companies and mass merchandisers who sell music
in electronic formats which may be downloaded onto personal computers and other
devices.  We expect to compete for revenues with a wide range of
companies who offer user downloads, including broadband Internet service
providers such as Yahoo! and MSN, as well as Internet retailers such as
Amazon.com, Bestbuy.com, Barnes & Noble, Virgin and
Walmart.com.  Finally, we also expect to compete with internet file
sharing services where music may be downloaded free of charge, often in
contravention of applicable copyright laws.




Many of our music
retail competitors have significantly more resources than we do, including
greater access to desirable digital music catalogs and the ability to license
those catalogs at preferential prices.  Such competitors may therefore
be able to offer goods and services at lower prices than we can, and may be
better positioned to attract customers than we are, all of which could harm the
ability of our online music business to compete effectively in the
marketplace.




The Internet and
media distribution industries have undergone a period of widespread business
consolidation; many companies in these industries have recently gone out of
business or have been acquired by competitors. As a result, we may be competing
with larger competitors that have substantially greater resources than we do. We
expect this consolidation and strategic partnering to continue.




We
believe that consumers in the 35+ age group would be interested in a website
which would allow them to buy music and, at the same time, assist a charity or
cause of their choice. We also believe that the 35+ age group is less likely to
use file sharing services because they may be less comfortable with internet
technology, and more likely to respect copyright laws. Accordingly, we will
focus the marketing efforts for www.charitytunes.com to a significant degree on
these older consumers. To do so, we must recruit established and recognizable
artists and charities with whom the 35+ demographic identifies. Our ability to
recruit such recording artists and charities in order to effectively market our
services to our target audience will play an important role in our success as a
company.




New
Products and Services





Wireless
Communications and Location Based Services and Products





On
May 1, 2009 we merged with On4 Communications, Inc. and adopted its business. As
a result, we now carry on business in the field of wireless communications,
offering a suite of complimentary services to telecommunications companies,
consumers and businesses.  Our platform is comprised of three core
components: Global Positioning System (GPS) device management; Location
Based Services (LBS) capabilities; and broadcasting of proprietary and
non-proprietary content.





With these three
core components, we are capable of delivering comprehensive wireless solutions
that can be tailored to address a wide range of markets.Our solution platform
integrates a range of location-aware devices such as GPS receivers, and
transmits data to a range of devices (e.g. web browsers, instant messages, short
message service/email and cell phones). Based on our core LBS platform, we
intend to develop various wireless services that deliver dynamic, personalized
location-driven information to subscribers. To date, our wireless communications
operation has been focused on the development of a two-way waterproof
speakerphone GPS assisted tracking device.





7




We
have established domestic and international relationships with Original
Equipment Manufacturers (OEMs), carriers and other industry leading companies in
the LBS market space which will assist us in entering our targeted market
segments. Our patent pending hardware, combined with the integrated suite of
products in concert with our strategic partnerships will facilitate the
co-branding, distribution and marketing with telecommunication companies,
wireless carriers, national retailers, major consumer brand companies and mass
media, and will align our sales and marketing efforts with established sales
channels.





LBS Industry
Overview




The primary
economic catalyst behind LBS is the desire of wireless/cellular service carriers
to grow both average revenue per user (ARPU) and the number of subscribers in
their core cellular markets. As a result, wireless carriers and their partners
are developing many new products, services and business models which are based
on providing location information. The value to the end user is not only the
actual location service, but also the information which the carrier can send to
the end user in relation to where they are located.




By employing GPS
and existing land-based cellular (mobile phone) infrastructure, wireless
carriers are able to provide location information and related entertainment
services to end users through a variety of wireless mobile devices. As a result,
consumers now have access a variety of personalized location services ranging
from basic self-positioning functions to locating nearby business, services and
amenities.




Examples of the
various location-enabled applications now available include those designed to
allow corporate managers and business owners to monitor employees, dispatch
personnel based on location information, and generate a wide range of reports
that include detailed location related information. The value in these
applications is their ability to assess and improve employee productivity,
optimize the use of human resources and other assets, and optimize critical
management and customer service response times.




The International
Telecommunications Union estimates that as of December 2007, there were 255
million wireless subscribers in the U.S, and the market for wireless data
services exceeded $23 billion.  Our management believes that this
profound acceptance of wireless products by the public has generated
unprecedented opportunities for manufacturers and retailers to influence
consumers on a consistent basis.  The future of the wireless
location-based-services market will be one where the importance of pure location
driven service will become secondary in importance, in as much as the
location-based-services platform will be the basis upon which valuable data and
information will be delivered to the end user or consumer.




Neutral
Architecture:





With the LBS
industry rapidly evolving in terms of technology, we believe that the only way
for a services provider to be successful is by embracing this diverse
environment rather than attempting to pick an individual winning technology or
single carrier. This neutral or “agnostic” approach to technology requires the
functional system to be an order of magnitude more intelligent than a system
where a single choice is made. However, once architected and constructed
property, the system can evolve gracefully because it was designed to do so
accordingly. New devices, network connections and application technology can be
integrated with a minimal amount of effort, speeding the time-to-market for new
innovative products and services. This approach has been specified with all
infrastructure partners we are working with.





8




Buy
vs. Build:





Our approach to
building our solution will be a thorough buy vs. build analysis on every
component. When a class of components has become an industry commodity, there is
no need or advantage to re-designing it. When a component is not a commodity, is
highly strategic to own and is cost effective to build, we intend develop and
operate such a proprietary component. Using this approach we intend to leverage
outsourced vendors for the bulk of our infrastructure needs and focus our
internal resources on marketing, sales and distribution.





We
have engaged a number of strategic vendors who already posses, support and
distribute the required services to other LBS providers. Some of the vendors we
have engaged include: Qualcomm Chipset Division, Qualcomm QES, WaveMarket,
DataTrail Inc., Networks In Motion (NIM), Aria Systems and OpenSource Inc. to
name a few. One strategic relationship that will be extremely critical and
valuable will be the growing relationship with Qualcomm. In this relationship we
have been identified as a launch partner for the new InGeo device technology
from Qualcomm. The InGeo reference design represents the latest generation of
devices that provide a complete tracking solution for non-cell phone personal
location devices and services, enabling enhanced GPS performance, improved
battery management and lower device costs. In addition, we are working with
Qualcomm and a Qualcomm certified contract manufacturer to build a custom
version of the InGeo device that is waterproof and robust enough for the pet
market and other environmentally challenging markets.





Principal
Products/Services





We
intend to offer next generation location based products and services with a
unique business model encompassing media content distribution, which ultimately
would deliver an end to end consumer and enterprise solution to a rapidly
growing location based services market by the first quarter of 2009. Our
multimedia content development and aggregation system will deliver voice, video
and data over most standards of both wired and wireless networks worldwide. Our
innovative patent pending device and proprietary content, PetsCell and PetsMo,
are a dynamic, software controlled wireless device and community based web
portal built to disseminate the full line of PetsMobility products and services.
To date, we have developed four separate product categories.





1.
Pets
Cell: Final testing of commercial version.





2.
Digital
Content: ON4 US has signed an agreement with a major North American
carrier.





3.
Pet
Lifeline: The Pet Lifeline wallet cards, call centre and website are all
ready for consumer orders.




4.
PetsMo Web
Community: Fully functional and ready for a national launch.




9




PetsCell





We
have developed a remotely controlled waterproof mobile communication device,
comprised of:





·
            Two way
      waterproof speaker/microphone


·
            Incoming
      number protection


·
            One button
      call back


·
            A global
      positioning device component


·
            Detachable
      faceplate for use in multiple
verticals


·
            Three
      programmable buttons


·
            Programmable
      indicator lights





The objective of
the design was to come up with a product which would have uses in multiple
consumer and enterprise verticals and to avoid the need for different hardware
and circuit boards. It was decided to design one unit which could be used in a
number of conditions and applications and would share the same basic platform
architecture.





The device has been
specifically designed to enable it to be used in numerous defined verticals.
More specifically, the device can be used for child safety, parental
supervision, personal protection, Alzheimer patients, law enforcement, animal
tracking identification and property assets tracking markets. The PetsCell,
model TX200, has not as yet been sold into the market place. It is Federal
Communications Commission (FCC) approved and has “Safe for Network
Certification” on both the TELUS and Sprint Networks.





Location
Based Services Platform





Our platform allows
our partners to tailor the functionality of the embedded applications to suit
the unique requirements of their target markets. A web-based platform is very
easy to adapt to unique market requirements. It is possible to use as-is or to
employ components of the total solution to provide customized solutions. The LBS
platform is highly configurable and scalable with an in-house mapping engine.
Software installation is not required on the user’s machines as all that is
required is a standard web browser to access the application.




Digital
media





Under the
PetsMobility brand, we have developed an integrated menu of proprietary web
based digital content specifically for the pet market. We have already created
proprietary content that will facilitate the interaction between retailers and
consumers that will take the form of a weekly cartoon panel entitled, “Life's
Ruff” and is currently available on the www.petsMo.com website and streamed to
handsets.





PetsMo Rex-messages





Weekly pet tips
delivered through text based messaging or video, as well as all wallpapers and
animated ringtones can be streamed to the consumer’s personal digital assistant
(PDA).





Consumer
Products – Pet Lifeline





In
addition to devices with LBS capabilities and digital media content, we have
also developed pet related consumer products. PET LifelineTM is safety
identification assurance for pet owners and provides the critical link of
communication to ensure consumers’ pets are cared for by designated guardians
during an emergency or an unfortunate event that leaves them incapable of
providing for the pet.





10




PET LifelineTM
identifies the pet owner and ensures their pets are not forgotten or stranded
during an emergency.  We believe that the PET LifelineTM is the only
national product of its kind that has the ability to protect pets in every city,
and home in North America. The PET LifelineTM call center is monitored 24 hours a
day 7 days a week with access throughout North America as well as notification
access worldwide via the PET LifelineTM web site. Each card has a unique
registered serial number that links all of the consumer’s identification to the
secure and confidential PET LifelineTM database which contains all the contact
information of the people the consumer has entrusted to care for their pets. The
Pet Lifeline card is fully developed and ready to be sold to both pet and
non-pet retailers. The retail cost is $19.99. Currently, the Pet Lifeline is
being marketed to seven resellers ranging from pet groomers, animal shelters and
pet retail stores. Presently, there are 124 test case subscribers in the Pet
Lifeline database.





PetsMo
– Web Site/Data Management





Through
PetsMobility, we have built a fully interactive community based website,
www.petsmo.com. The PetsMo website isfully
functional and contains both proprietary and non-proprietary content. The site
features celebritypets,
pets of the week, veterinary clinics, pet grooming, dog walking parks and member
chat forums.PetsMobility
has initiated a soft launch of the site but anticipates launching the PetsMo
website by introducing itin
10 to 15 major North American cities. There will be city specific content from
the respective cities at roll-out.The
next generation upgrades will consist of virtual dog walking as well as other
innovative pet related activities,services
and products.





Manufacturing





Our manufacturing
partners have established relationships with code division multiple access
(CDMA) and global system for mobile communications (GSM) wireless carriers both
in North America and abroad. We has chosen to focus on the CDMA wireless
carriers for two key reasons; the superiority of their digital networks
(coverage and the technical capabilities) of the Qualcomm GPS CDMA
technology.





Market





The future of the
wireless LBS market will be one where the importance of pure "locates" will
become secondary in importance in as much as the LBS platform will be the basis
upon which usable data and information will be delivered to the end user or
consumer specific segment. A 2008 research study by ABI Research, identified
that the top 5 largest LBS segments both in 2006 and in 2013 will be: personal
navigation, enterprise, family tracker, information (points of interest), and
friend finder. Personal navigation services are projected to reach 82 million
worldwide subscribers, with information services projected to reach 48 million
worldwide subscribers. Enterprise and personal navigation are projected to be
the highest revenue generating sectors from a revenue perspective, with the
enterprise segment projected to reach sales of $6.5 billion annually and the
personal navigation segment, $4.3 billion annually.





11




LBS
Market Enabling Developments





Over the past two
years, significant market enabling developments have occurred:





1.     
The arrival of highly accurate, reliable, cost effective, tracking devices that
have achieved critical battery life and form factor (size & weight)
thresholds. In additional, due to the physical size and performance of the
devices, they are now being produced by a growing number of manufactures (both
small & large). It has also become a priority for the wireless carriers to
certify these devices for the rapidly growing LBS and Telematic
marketplaces.





2.     
Wireless carriers are now providing lower cost data-only plans. There is a major
change in carrier pricing as they acknowledge the significance and future
revenue importance of data only devices in the LBS and integrated
telecommunications and computer/information system markets. This is a result of
next generation digital networks that improve the network capacity for
data.





3.     
The acceptance of Fortune 1000 companies for the use of the internet-based third
party hosted corporate solutions. Whether contracted payroll, sales force
management, and now asset management, large corporate are accepting this as
standard practice and necessary competitive practice.





4.     
Overall solution cost of ownership reduction as a result of the combined impact
of the market drivers above has made LBS solutions available to a wider market.
LBS solutions provide asset


security and
improved logistics that now has a much more tangible return on
investment.





5.     
LBS technologies are able to support security based applications for government,
corporate and personal markets.





6.     
Growing consumer awareness and demand for LBS solutions





7.     
With the above market drivers in place and consistent technology, performance
and economic improvements as per standard technology and market evolution it can
be


definitively stated
that the true commercial age of wireless LBS has arrived.




Key
Market Drivers





There are a number
of key factors dictating the deployment, acceptance and use of LBS based
products and services by both the consumer and enterprise segments. The key
market drivers are privacy protection, social government, technology and
economic.





1.     
Privacy Protection





Privacy based
issues or, security and privacy based issues, are one major impediment in
preventing widespread use and/or acceptance of LBS based products and services.
From both a consumer and LBS provider's perspective, the critical issues facing
the LBS market revolve around security and privacy. Consumers currently consider
location information to be highly sensitive, and are very wary of a “Big
Brother” or “Orwellian” products initiated by large corporations. Successfully
addressing the consumer’s privacy concerns will allow for accelerated growth and
market acceptance.




12




2.     
Social





Technology often
runs well ahead of consumer acceptance. As there is more widespread penetration
of LBS information into mainstream use, familiarity with LBS will increase.
Services such as Google maps all work toward alleviating consumer anxiety as
there is an ever increasing visibility of LBS information in everyday life
through news programs.





3.     
Social Government





Governments'
increasing willingness to mandate the use of and public supply of LBS
information is a key driver of mobile LBS. Mobile operators are increasingly
required to comply with legal regulations to provide caller location information
to emergency services. This has been particularly the case in the U.S., Europe,
and Japan. Government sites, web portals, etc. have to some extent paved the way
for more innovative (mobile) LBS globally.





4.     
Technology





Prior to any
product gaining widespread acceptance the design and engineering underlying it
must produce a cost effective easy to use device/solution for the end-users.
Just as internet usage dramatically increased once the 56K download speed was
surpassed, so too, is it with mobile LBS. Broadband can now support many more
LBS applications. Initial consumer acceptance of early renditions of LBS
products and services was hindered by the unsophisticated nature of the product
offering; specifically, cost of service and the limited performance of the
devices.





In
general there has been a vast improvement in mobile technology such as longer
battery life, accompanied with larger screens, color graphics and the overall
maturation of geo-spatial technology and delivery platforms. As mobile
technology continues to improve, the demand and uptake by consumers will
increase.




5.     
Economic





The variety of LBS
devices and customer market specific solutions, in conjunction with new carrier
data services are driving the LBS market. Carriers are endeavoring to increase
the subscribed units in service and LBS applications are an ideal way to achieve
this objective.





LBS applications
cover nearly every attractive wireless demographic market, including: parents,
teenagers, singles, college students, online communities, business executives,
and entrepreneurs. This also includes businesses that significantly depend on
mobile voice and/or data communications to operate their business, such as
companies with significant field employee organizations, and businesses
dependent on knowing the location of their assets at any moment, such as
interstate highway trucking.





Consumer
Segment





The key driver of
mobile wireless applications and LBS products is the ever increasing number of
cell phones in the marketplace. On a global basis all GPS handsets manufactured
since 2005 are done so with full LBS capability and as a consequence, global
shipments of GPS handsets are projected to increase with an estimated 198
million units annually in 2007 to over 618 million units annually in 2013 (ABI
Research, 2008). The cumulative total of GPS enabled handsets shipped during
this 2007 to 2013 period will exceed 3 billion units.





13




There are four
basic reasons consumers are increasingly purchasing wireless
phones:





·
            wireless
      prices continue to decline,


·
            the number of
      minutes in landline service plans continue to
  increase,


·
            wireless
      carriers are bundling large increments of evening, weekend local and long
      distance calling into consumer calling plans at little to no additional
      cost,


·
            wireless
      carriers continue to improve the available geographic coverage with
      continued network build-outs.





With mobile
carriers creating innovative pricing packages to drive demand in the mobile
wireless consumer and enterprise segments the end result is that there will
continue to be an increase not only in wireless subscribers, but in wireless
usage in general. Traditional wire line subscribers are increasingly migrating
to mobile cell phones in increasing numbers, thereby increasing the number of
cell phones in the market place.





In
addition to the increasing number of overall mobile subscribers, there is also a
trend towards an increase in the number of minutes used per wireless subscriber
on a year over year basis. The Cellular Telecommunications and Internet
Association (CTIA), which is the international association for the wireless
industry reported that mobile data usage, such as text and multimedia messaging,
mobile web, and downloads, have increased substantively since 1995.





December
      2007
            December
      2005
            December
      2000
            December
      1995Minutes
      of use
            2.1T
            1.5T
            533.8B
            431.9MMonthly
      SMS messages
            48.1B
            9.8
            14.4M
            N/AAnnualized
      yearly SMS messages
            363B
            81B
            N/A
            N/ACell
      sites
            213,199
            183,689
            104,288
            22,663




K=Thousand  
M=Million   B=Billion   T=Trillion   (CTIA Market
Facts)





The underlying
theme is that wireless communication is so pervasive because, culturally, it is
now seen as a standard and acceptable way to communicate in most environments.
The almost seamless interaction between the Internet and the mobile consumer has
created growth opportunities in emerging verticals and for products that were
not accessible to vendors a few years ago. For the first time, manufacturers and
retailers have the ability to “touch” and influence consumers on a daily or even
hourly basis. The consumer demand for mobile wireless products will continue to
increase as device form factors improve, usage costs decrease and user interface
enhancements continue.





A
2006 survey of cell phone users in the U.S. conducted by the Pew Internet and
American Life Project found that there is still plenty of room in the U.S.
market for the sale of advanced cell phone services. Their survey showed that
only 4% of cell phone users had employed their phones to access mobile maps
while 47% said they would like to do so. Likewise, only 8% said they had used
cell phones to send and receive email (24% would like to do so) and only 14% had
used them to access the Internet (16% would like to do so). Cell phone usage has
changed considerably since
2006. Recent data from the CTIA clearly demonstrates that minutes used and
monthly SMS messages sent, annualized for all U.S. subscribers show substantive
increases from 2005 to 2008.





One-third of all
wireless subscribers state that their primary or only reason for having wireless
service is for personal security both at home and away. This would entail
security for: families, parents, seniors, singles, kids, teens and
latch-key/school monitoring.





Shipments for
portable devices with LBS capabilities have also increased. Total global
shipments of mobile GPS navigation devices in 2007 were up 132% from 2006 (the
LBS-zone). Navigational assistance was the first LBS segment to gain widespread
market acceptance and have high commercial uptake. With the success of
navigational assistance, other LBS segments are expected to follow a similar
market acceptance trend.





Consumer friendly
devices enabled for location-based services that are integrated with stable,
accurate, broadly implemented handset-based (e.g. assisted GPS) location
technologies, will allow for the facilitation of a strategic trend towards
client-based mobile applications. Improvements to network-based infrastructures
have greatly enhanced network transmission capabilities for data exchange and
this has led to an increase in mobile subscribers over the last 3-4
years.





The total
addressable worldwide market of location-enabled subscribers in 2008 is
projected to increase by 168% with revenues increasing 169%. Worldwide
subscribers will rise from 16 million in 2007 to 43.2 million in 2008 and
revenues are expected to increase from $485 million in 2007 to over $1.3 billion
in 2008. The uptake of LBS services in the market place has been slower than was
originally anticipated but the market now seems poised to grow quite quickly.
(Gartner Research, 2008).





Enterprise
Segment





Current versions of
location-enabled applications are giving managers the ability to track time
spent on jobs, to dispatch based on location, and to generate a range of reports
that include location information. The readily identifiable business value is
coming from applications targeted at improving employee productivity,
eliminating paper-based data collection and associated errors and delays, and
increasing utilization of assets while decreasing service response
times.





The wireless and
LBS markets already have what they need from an infrastructure perspective to be
successful in terms of widespread usage and acceptance of the products and
services from both a consumer and enterprise perspective. There is a regulatory
environment which at worst is neutral for LBS services and in fact can be seen
as being very positive in some areas such as regulation concerning security
services related to lone-workers.





Market
Growth





The composition of
usage both in wireline and wireless will continue to shift towards greater
acceptance by consumers for data/infotainment to be delivered to their handsets.
The widespread cultural acceptance of wireless communication will result is a
robust environment for wireless and LBS opportunities for the foreseeable future
in both the consumer and enterprise segments. Industry statistics corroborate
analyst’s projection for increased cell phone usage well beyond
2009.




14




Marketing Plan and
Strategies




Target
Markets





While the design,
robustness and the underlying technology for the PetsCell enables the device and
LBS platform to be used in almost all identifiable verticals, from an
operational and strategic point of view it is unlikely that we would be able to
successfully roll out the application in numerous verticals simultaneously. We
have segmented the potential applications of the technology into an enterprise
segment and a consumer segment which are divided into sub segments under both
the enterprise and consumer markets.





Enterprise
Segment





Industry
            Maintenance
            Government
            PoliceTransportation
            
            MedicalDelivery
            
            EducationSecurity
            
            MilitaryInvestigation
            
            Search
      & RescueEvent





Business breakdown
by employment in specific industries (U.S. Bureau of Labor
Statistics):





·
            2.4 million
      are employed in agriculture, forestry, fishing, hunting and
      mining.


·
            9.1 million
      are employed in construction.


·
            17 million
      are employed manufacturing.


·
            6.8 million
      are employed in transportation, warehousing and
  utilities.


·
            12.4 million
      are employed in professional, scientific, management, administrative and
      waste management services.





These include fleet
management/dispatch, workforce and sales force management and a variety of
public sector location applications.





Consumer
Segment





Personal
      Assets
            AutoRecreational
      VehiclesAll Terrain
      VehiclesMarine
      (personal water craft)SecurityKids/TeensPets





Current studies all
support the notion that one of the underlying primary drivers for the demand for
LBS is safety. Consumers view wireless LBS as a means of alleviating concerns
about safety either at home or away. It is estimated that on a national basis
parents or primary care givers will on average contact law enforcement
authorities over 2,100 times per day regarding the disappearance of a missing
child (Missing Child World Press 2008).





15




The National Center
for Missing and Exploited Children (NCMEC) reports that 74% of abducted children
who are murdered are dead within three hours of the abduction. These figures
indicate the strong market need for a method of quickly and reliably locating
missing children. This so-far untapped market is quite large. According to the
National Center for Education Statistics, in the U.S. alone there
are:





·
            33 million
      children in elementary school (grades
1-8)


·
            4 million
      children in kindergarten


·
            4.6 million
      children in nursery/preschool





Though the market
potential for kid/teen monitoring is substantive, we believe that there will be
a significant push back from parent organizations as well as resistance from
kids/teens in general to be tracked 24/7. Most of the concerns will revolve
around privacy issues. Child tracking however, if properly implemented in
specific situations, would alleviate many of the privacy issues and still be
acceptable from a business perspective. We have the potential to sell tracking
units and services for over 60,492,447 children under the age of
14.





Another potentially
lucrative market segment is the pet segment. The pet industry is massive and
continues to show substantive year over year gains. In 1994, spending in the pet
industry in the U.S. alone was $17 billion. By 2007 the figure was $41.2 billion
and is expected to exceed $43 billion in 2008. To place the magnitude of this
dollar amount into perspective, in 2003 consumers in the U.S. spent $20 billion
on toys, $24 billion on candy and $32 billion on pet related products. (American
Pet Products Manufacturers Association).





The medical market
is another vertical which we plan to enter. Our devices are ideally suited for
this segment. As an example of the revenue potential in the medical market,
Alzheimer’s patients are estimated to number 4.5 million people. Of note, the
median family income for this segment is greater than $51,000 yearly. There are
an estimated 5.2 million people in the United States afflicted with Alzheimer’s
(Alzheimer’s Association, Alzheimer’s Fact and Figures 2008).





Market
Entry Strategy





From a macro
perspective, we have and will continue to establish and build domestic (North
American) and international partnerships, sign licensing agreements with
Original Equipment Manufacturers, carriers and major market players, utilizing
our proprietary technologies to facilitate efficient entry into the consumer and
enterprise markets. Our entrance into the consumer market will be accelerated
through the implementation of a multi-pronged approach. By forging strategic
partnerships including; co-branding, distribution and marketing with 25 telecommunication companies,
wireless carriers, national retailers, major consumer brand companies to align
our sales and marketing efforts with established sales channels.





Importance
of Identifiable Intangibles (brands, etc.)





Management believes
that brand loyalty is the ultimate goal a company strives for with a branded
product. Brand loyalty has a direct effect on a company’s bottom line. The
average company loses 50% of their customer base every five years. This
translates into a 13% annual customer “churn rate”, which is the rate of
customers who subscribe to a particular service that discontinue such
subscription in a given time period. For a firm to realize a real 1% increase in
sales, they must account for the 13% annual loss and thus increase sales by 14%.
In an ever increasingly competitive environment this can be a costly
undertaking. Reducing churn rates leads to brand loyalty which can, in turn,
lead to the opportunity for premium pricing. (Customer Relationship Management –
CRM, Polaris Marketing Research, Comms Business)





The issue of brand
loyalty has been examined at great length. Branding is by far one of the most
important factors influencing an item's success or failure in the marketplace,
and can have a dramatic impact on how the “company behind the brand” is
perceived by the buying public. In other words, the brand is not just a
representation of a company's product; it is a symbol of the company itself, and
that is where the core of brand loyalty lies. By creating a collaborative
non-competing marketing platform, we will provide an exceptional opportunity for
participating companies.





Enterprise





The enterprise
market is somewhat more difficult to estimate in terms of realizable market
potential mainly due to the fact that our technologies and products will benefit
any business that depends on knowledge of the whereabouts of their products,
services, vehicles, valuable parcels or outside personnel on a real-time basis.
The keys to success in this segment are threefold:





·
            LBS solutions
      can now generate positive returns on investment for enterprise
      customers.


·
            The ease and
      ability to self-manage this program internally in the
      organization.


·
            The
      configuration of devices, which allows businesses to easily customize each
      individual device based on their unique needs for each individual
      application.




16




Target
Market Strategy





For any company in
an emerging market the key is to build product and brand awareness and to gain
market share as quickly as possible. We will sell our device through joint
venture partnerships and Original Equipment Manufacturers into both consumer and
enterprise verticals where their device is applicable. Pets are big business and
are increasingly becoming nearer and dearer to their owner's hearts and purse
strings, and are often considered an integral part of the family. In 2003 pet
grooming, boarding and training was a $16 billion industry. By 2008, this is
expected to reach an estimated $22.2 billion. America's number one U.S. pet
retailer, PetSmart, will double the number of its Petshotels and Petco is
launching a pets hospitality concept. (American Pet Products Manufacturers
Association)





We
intend to access this market with a complete all encompassing product offering.
ON4 US operating under their trademarked brand name of “PetsMobillty,” will
provide “Innovative Products and Services for People and Pets on the Go.” In
keeping with this corporate edict, PetsMobility's will provide a fully
integrated suite of products that will support their flagship product, the
PetsCell, as well as provide significant revenue streams. PetsMobility will
derive  their revenue from three core products: The PetsCell, the two
way waterproof voice enabled GPS pet tracking device PetsMo, an online
interactive community for pet lovers and their Pets e-media division, “Ruff
Entertainment” that will stream proprietary pet related information and
entertainment to handsets and laptops via a wireless format.





Distribution





We
intend to sell our products domestically through direct and indirect sales
channels and specialty markets. Our initial sales and distribution strategy is
to establish product awareness and build volume through a distribution strategy
comprised of a combination of direct and indirect channels. Ongoing inquiries
from consumers interested in purchasing the product directly from the U.S. and
traffic to the web site provide strong evidence of the underlying consumer
interest in acquiring the product. Capitalizing on this awareness, we have been
able to build traffic on our web site and our partnership with affinity groups.
We believe a concerted Internet based marketing effort will work in harmony with
traditional bricks and mortar sales channels in a cost effective way of
establishing us in the market. Direct-to-consumer distribution channels include:
e-commerce, telesales, partner programs, and possibly our own kiosks located in
high traffic retail locations.





Retail
Sales Channel





To
achieve our volume and awareness goals, our sales efforts are focused on gaining
distribution through national consumer stores and various security companies, as
well as regional and local retailers. We intend that the PetsCell will be
distributed through strategic partners focused in the pet industry. To date we
have significant interest from most of the major nationally recognized pet
retailers including Pet Smart and Pet Mod. We will also look to big box retail
stores such as Best Buy, Circuit City, RadioShack, Staples, Wal-Mart, and Target
as potential sales channels.





Additional
Sales Channels and Direct to Enterprise





To
build market share and profitability, we plan to augment our sales efforts with
additional channels, including OEM, government, and business-to-business
channels. We believe these broad distribution channels, along with the retail
and the direct-to-consumer channels will create opportunities for us to pursue a
diverse range of consumers throughout the United States and abroad.





Order
Fulfillment and Provisioning





Order fulfillment
is a critical component of the sales and distribution process. We intend to
outsource the order fulfillment for the PetsCell. Pet Lifeline will be processed
by us directly. The key components to the order fulfillment are as
follows:





1.     
Inventory Management





2.     
Order Management - accept and process sales orders that originate from the
designated sales channels.





3.     
Warehouse Management





4.     
Distribution Management





5.     
Returns and Repair Management





Device provisioning
will be outsourced and handled either by our manufacturing partner or by a third
party entity that specializes in the provisioning of mobile wireless
handsets.





Channel
Market to OEM’s





We
will focus our efforts to partner with Original Equipment Manufacturers of
nationwide cellular providers and computer manufacturers. We will emphasize our
products’ potential as an additional source of revenue for them, both at the
front end for product sales, and in the case of cellular providers, with
recurring monthly revenues; this should make our product a desirable addition to
their product lines. By solidifying these partnership agreements, we will also
enable cross-marketing back into the consumer market through their sales forces'
efforts and their advertising, increasing our sales efforts nationwide. We
believe that once partnered with these companies, our channel market partners
(resellers) will advertise our devices and services as new products in their
traditional outlets, primarily print advertising and in-house point of sale
material, in order to increase mutual sales and brand awareness, benefiting both
organizations.





17




Business
Market





We
will be marketing to businesses through traditional sales efforts, such as
advertising in trade publications and establishing a presence at select trade
shows geared towards businesses in our market segment. For the larger companies
we will target, we will offer the free use of a limited number of our products
for a limited time, to establish their impact in controlling costs of outside
fleets and personnel, in order to penetrate and gain market share in this
segment. We believe once senior management of these businesses feel more in
control of the whereabouts of their outside concerns (personnel and vehicles,
deliveries, packages, equipment, etc.) they will understand that they can, in
essence, manage their outside logistics from the comfort of their office more
efficiently than through traditional methods.





The success of our
corporate strategy, through our PetsMobility brand, is predicated on our ability
to either develop and launch our own proprietary products, or to work in
conjunction with existing telecommunications carriers and retail manufacturers
on a partnership or joint venture basis. We will look to a royalty share revenue
model in these instances to facilitate this deployment of pet related
communication products and services.





Competition





The wireless
location-based services market is a new industry that is quickly becoming highly
competitive. In the pet vertical market there are companies that are currently
operating in this vertical who claim to provide pet tracking related solutions.
Companies such as Zoombak, PetSafe, Global PetFinder, and Pocket Finder, are all
GSM based. The PetsMobility Pet Cell family of products will have the latest
generation of CDMA gpsOne® advanced location technology.





PetsMobility
Competitive Advantage





PetsMobility has a
competitive advantage over existing pet tracking solutions from a number of
perspectives. Firstly, there is the technological advantage. Presently, there
does not exist another company in this vertical with the technology that
PetsMobility will be bringing to the market place. PetsMobility's research and
development partner has taken this technology and improved upon it such that the
PetsMobility tracking solution has been optimized as the most cost effective
solution based on quality and consistency of locates versus price.





We
have not undertaken an independent thirdparty study of the market
acceptance of the product; however, two recent entrants into the pet tracking
vertical demonstrate that consumers are willing to spend money on tracking
devices for their pets. Zoombak’s has recently placed orders for their GSM
product with PetsMart, who currently operate almost 1000 stores across North
America. Further, Rocky Mountain Tracking recently released a pet tracking
device which retails for $649 which exceeds the project cost of our device by
160%. We intend that our product(s) will be superior to these offerings in terms
of price, functionality and robustness.





PetsMobility will
deliver more consistent quality locates across a broader spectrum of conditions
than the technology that is currently in the market place. We believe that we
hold a distinct competitive advantage over all identified potential direct
competitors. In addition to our superior performance and features, only the
PetsCell is designed to have the combination of enhanced assisted GPS (gpsOne)
technology, removable rechargeable battery and is waterproof.





Secondly,
PetsMobility is proposing a much more complete solution for pet lovers than what
is currently available in the market place. The pet market is an extremely
dedicated and loyal consumer segment. As such, it is necessary to position
PetsMobility as being much more than a technology company and to create a
marketing continuum for the pet consumer. By positioning PetsMobility as a
company that is all about “Innovative Products and Services for Pets and People
on the Go,” it is possible to leverage the bond which exists between owners and
pets and truly differentiate PetsMobility from its competitors on a number of
different levels.





Future
Developments





As
the product development cycle for technology products may take upwards of one
year, it is imperative that new products are initiated well before existing
products reach obsolescence. We have already commenced the planning of a
second-generation product. Working closely with a major U.S. chip manufacturer,
this new product is technologically superior to the first generation
PetsCell.




18




General




Subsidiaries




We
currently have three wholly owned subsidiaries. The first, Sound Revolution
Recordings Inc., is a company incorporated in British Columbia for the purposes
of carrying on business in British Columbia. The second, Charity Tunes Inc, is a
company incorporated in Delaware for the purpose of distributing music and other
media online.  The third, PetsMobility Inc., is a company incorporated
in Delaware for the purposes operating the website www.petsmo.com and developing
and marketing the PetsCellTM TX200 .




Intellectual
Property




We
own the copyright in the content of the websites www.soundrevolution.net,
www.charitytunes.com, www. petsmo.com, www. Petlifeline.com, and
www.on4communications.com.  We also own all the copyright and common
law trademark rights in our logos for Sound Revolution, Charity Tunes, On4
Communications, PetsMobility and PetLifeline.




We
also own the intellectual property described in the following trademark and
patent applications:




1.
            Patent
      application 2,475,823 titled “pet communication system”, filed in Canada
      on July 16, 2004 and laid open for public inspection on January 16,
      2006.





2.
            Patent
      application CA2005/001122 titled “mobile communication system and device”,
      filed under the Patent Cooperation Treaty on July 18, 2005 claiming
      priority to Canadian application
2,475,823.





3.
            Patent
      application 2005263147 titled “mobile communication system and device”,
      filed in Australia claiming priority to the PCT application (national
      phase entry on February 2, 2007).





4.
            Patent
      application 553247 titled “mobile communication system and device”, filed
      in New Zealand claiming priority to the PCT application (national phase
      entry on February 2, 2007).





5.
            Patent
      application EP20050767052 titled “mobile communication system and device”,
      filed in the European Union claiming priority to the PCT application
      (national phase entry on May 25,
2007).





6.
            Trademark
      application 78603402 for “ON4” and design, filed in the United States on
      April 6, 2005, and published for opposition on October 9,
      2007.





7.
            Trademark
      application 1,380,123 for “PETSMOBILITY”, filed in Canada on January 14,
      2008 and formalized on January 29,
2008.





8.
            Trademark
      application 1,380,122 for “PETSCELL”,filed in Canada on January 14, 2008
      and formalized on January 29, 2008.





9.
            Trademark
      application 1,380,124 for “PAWTRAX”, filed in Canada on January 14, 2008
      and formalized on January 29, 2008.





10.
            Trademark
      application 1,380,126 for “MINDWARE”, filed in Canada on January 14, 2008
      and formalized on January 29, 2008.





11.
            Trademark
      application 1,380,125 for “PETSMO”, filed in Canada on January 14, 2008
      and formalized on January 29, 2008.





However,there
can be no assurances that we will obtain any intellectual property protection as
a result of prosecuting these applications or that any of these applications
will be granted by the applicable intellectual property office. No patent
applications have yet been granted so there is currently no patent protection.
None of the trademark applications have yet been granted so no registered
trademark protection is currently available.





19




Government
Regulations




Laws and
regulations directly applicable to Internet communications, commerce and
advertising are becoming more prevalent. In addition to recent laws enacted by
the United States Congress regulating children’s privacy, copyrights and
taxation, Sound Revolution is and will continue to be subject to rules and
regulations around the world which affect the business of the
Internet.  Also, because Sound Revolution carries on business in
Canada, it is subject to laws regarding employment, taxes and other regulatory
issues for its Canadian operations. The European Union recently enacted its own
privacy regulations that may result in limits on the collection and use of
certain user information. The laws governing the Internet, however, remain
largely unsettled, even in areas where there has been some legislative action.
It may take years to determine whether and how existing laws such as those
governing intellectual property, privacy, libel and commerce will prompt calls
for more stringent consumer protection laws, both in the United States and
abroad, that may impose additional burdens on companies conducting business on
the Internet. Furthermore, the Federal Trade Commission recently investigated
the disclosure of personal identifying information obtained from individuals by
Internet companies.




Evolving areas of
law that are relevant to our business include privacy law, proposed encryption
laws, website content regulation and sales and use tax. For example, changes in
copyright law could require us to change the manner in which we conduct business
or increase our costs of doing business. Because of this rapidly evolving and
uncertain regulatory environment, we cannot predict how these laws and
regulations may affect our business. In addition, these uncertainties make it
difficult to ensure compliance with the laws and regulations governing the
Internet. These laws and regulations could harm us by subjecting us to liability
or forcing us to change the way in which we do business.




We
will also be subject to law and regulation related to the telecommunications
industry.  The telecommunications industry is highly regulated, and
the regulatory environment in which we intend to operate is subject to change.
In accordance with Federal Communication Commission (“FCC”) rules and
regulations, wireless transceiver and cellular handset products are required to
be certified by the FCC and comparable authorities in foreign countries where
they are sold. If we sell our anticipated products in Europe, we will be
required to comply with relevant directives of the European Commission. A delay
in receiving required certifications for our new products or enhancements to our
products, or a loss of certification for our intended products may adversely
affect our business.




Employees
and Consultants




As
of February 28, 2009 we had no full-time or part-time employees.





As of May 25, we had 8
full-time employees.Penny Green, our sole
officer and a director on our board of Director’s provide her services free of
charge in the areas of management, marketing and finance.  Cameron
Robb and Catherine LeBlanc do not currently receive compensation for their
services as directors on our Board of Directors. We currently engage independent
contractors in the areas of accounting, legal, auditing services, investment
banking and corporate development.





Item 1A. Risk Factors





Not required for
smaller reporting companies.





Item 1B. Unresolved Staff
Comments





None.





Item 2.    Properties





Our principal
office is located at 925 West Georgia Street, Suite 1820, Vancouver,
British Columbia V6C 3L2, and is provided to us free of charge by Penny
Green our sole officer and Director.





We
also have an operations office in Phoenix, Arizona, and an operations and
product development facility in Richmond, British Columbia. Both facilities are
leased.





Item 3.    Legal
Proceedings





We
know of no pending or active material legal proceedings to which we are a party
and we are not aware of any legal proceedings contemplated by any governmental
authority against us.





Item 4.    Submission of
Matters to a Vote of Security Holders





On
April 10, 2009 the respective shareholders of Sound Revolution Inc. (the
“Company”) and On4 Communications, Inc. approved the amended merger agreement
between the two companies entered into on April 7, 2009 and reported by the
Company on a Current Report on Form 8-K on April 13, 2009.




20




PART II




Item 5.    Market for
Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.




Market
Information





Our common stock is
not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board
under the symbol “SRVN.OB”. Our common stock began being quoted on the OTC
Bulletin Board on June 23, 2005. Trading in stocks quoted on the OTC Bulletin
Board is often thin and is characterized by wide fluctuations in trading prices
due to many factors that may have little to do with a company's operations or
business prospects. We cannot assure you that there will be a market for our
common stock in the future.





OTC Bulletin Board
securities are not listed or traded on the floor of an organized national or
regional stock exchange. Instead, OTC Bulletin Board securities transactions are
conducted through a telephone and computer network connecting dealers in stocks.
OTC Bulletin Board issuers are traditionally smaller companies that do not meet
the financial and other listing requirements of a regional or national stock
exchange.




Holders




As
of May 27, 2009, there were 21 holders of record of our common
stock.




Dividends





Historically, we
have not paid dividends on shares of our common stock and we do not expect to
declare or pay dividends on shares of our common stock for the foreseeable
future. We intend to retain earnings, if any, to finance the development and
expansion of our business. Our future dividend policy will be subject to the
discretion of our Board of Directors and will depend upon our future earnings,
if any, our financial condition, and other factors deemed relevant by the
Board.




Equity
Compensation Plans




As
of February 28, 2009 and May 27, 2009 we did not have any equity compensation
plans.




Recent
Sales of Unregistered Securities




From March 1, 2008
to February 29, 2009, we made the following sales of unregistered securities
that have not been previously disclosed:





·
            On March 12,
      2009 we issued a total of 10,000,000 shares of our common stock for total
      proceeds of $10,000 to three investors. These shares were issued without a
      prospectus in reliance upon Regulation S of the Securities Act of 1933. We
      also issued a total of 3,000,000 shares of our common stock for total
      proceeds of $3,000 to four investors. These shares were issued without a
      prospectus in reliance upon Section 4(2) of the Securities Act of
      1933.




Our reliance upon
the exemption under Section 4(2) of the Securities Act of 1933 was based on the
fact that the issuance of these shares did not involve a “public offering.” Each
offering was not a "public offering" as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of securities offered. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, the investors had the necessary investment intent as required by
Section 4(2) since they agreed to and received a share certificate bearing a
legend stating that such shares are restricted pursuant to Rule 144 of the
Securities Act. This restriction ensures that these shares would not be
immediately redistributed into the market and therefore not be part of a "public
offering." The investors negotiated the terms of the transactions directly with
our executive officers. No general solicitation was used, no commission or other
remuneration was paid in connection with these transactions, and no underwriter
participated. Based on an analysis of the above factors, these transactions were
effected in reliance on the exemption from registration provided in Section 4(2)
of the Securities Act for transactions not involving any public
offering.





21




Our reliance upon
the exemption under of Regulation S of the Securities Act was based on the fact
that the sale of the securities was completed in an "offshore transaction", as
defined in Rule 902(h) of Regulation S. We did not engage in any directed
selling efforts, as defined in Regulation S, in the US in connection with the
sale of the securities. Each investor was not a US person, as defined in
Regulation S, and was not acquiring the securities for the account or benefit of
a US person.





Additionally, the
investors were given adequate access to sufficient information about us to make
an informed investment decision.  None of the securities were sold
through an underwriter and accordingly, there were no underwriting discounts or
commissions involved.




Use
of Proceeds from Sale of Registered Securities




We
did not receive any proceeds from the sale of registered securities during the
fiscal year ended February 28, 2009.




Item 6.    Selected Financial
Data





Not
applicable.





Item 7.    Management’s Discussion and Analysis of
Financial Condition and Results of Operation




Safe Harbor




This Annual Report
on Form 10-K contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including, "could" "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" and the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially.  While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested in this Annual Report.




Results
of Operations




Revenues





During the year
ended February 28, 2009 we generated nominal revenues of $136 compared to our
revenues of $760 for the period ended February 29, 2008. From our inception on
June 4, 2001 to February 28, 2009 we generated nominal revenues of $5,371. As of
February 28, 2009 we had total assets of $18,515 and total current liabilities
of $614,976.  We anticipate that we will incur substantial losses for
the foreseeable future and our ability to generate any revenues in the next 12
months continues to be uncertain.


Expenses





During the fiscal
year ended February 28, 2009 we incurred total expenses of $170,074 including
$38,259 in amortization, $9,374 in general administrative expense, $25,000 in
management fees, $16,008 in marketing expense, and $81,433 in professional
fees.





This compares to
our total expenses of $285,051 incurred during the fiscal year ended February
29, 2008 which included $62,459 in amortization, $15,454 in director fees,
$29,219 in general and administrative expense, $100,019 in management fees,
$48,795 in marketing expense, $28,391 in professional fees, and $714 in research
and development.





22




The significant
decrease in our total expenses in fiscal 2009 resulted primarily from decreased
management fees resulting from the downsizing of our management.





From our inception
on June 4, 2001 to February 28, 2009 we incurred total expenses of $966,650
including $118,452 in amortization, $22,485 in directors’ fees, $158,730 in
general and administrative expense, $281,007 in management fees, $72,980 in
marketing, $235,367 in professional fees, and $77,629 in research and
development.





Our general and
administrative expenses include fees for telephone service, courier service,
postage, office supplies, banking, and website, server and software
maintenance.





Net
Loss





During the fiscal
year ended February 28, 2009 we incurred a net loss of $180,184 compared to our
net loss of $231,796 for the period ended February 29, 2008.  From our
inception on June 4, 2001 to February 28, 2009 we incurred a net loss of
$952,309.  Our net loss was mostly funded by a combination of private
placements and shareholder loans.





Liquidity
and Capital Resources





As
of February 28, 2009 we had $3,598 in cash, $18,515 in current assets, $614,976
in current liabilities and a working capital deficit of
$603,564.  This compares to $1,794 in cash, $67,457 in current assets,
$486,734 in current liabilities and working capital deficit of $473,562 for the
fiscal year ended February 29, 2008.


As
of February 28, 2009 we had an accumulated deficit of $952,309, an increase of
$180,184 from our deficit of $772,125 accumulated as of February 28,
2008.





From our inception
on June 4, 2001 to February 28, 2009 we spent $445,386 on operating activities
including $76,752 spent during fiscal 2008 and $122,016 spent during fiscal
2009.  The decrease in spending during fiscal 2009 resulted primarily
from decreased management fees.


From our inception
on June 4, 2001 to February 28, 2009 we received $570,980 from financing
activities, including $157,703 received in fiscal 2008 and $124,897 received in
fiscal 2009.




If
we complete our plan of merger with On4 Communications we anticipate that our
level of business activity will increase. However, until our plan of merger is
complete, we do not anticipate any significant changes in our level of activity.
We have not been able to reach the break-even point since our inception and have
had to rely on outside capital resources. We do not anticipate making any
significant revenues for the next year.




For the next 12
months we will seek to complete our plan of merger with On4 Communications, Inc.
Completion of the plan of merger will require us to incur increased professional
fees in relation to financing activities, continuous disclosure obligations and
general legal and accounting work.





Our planned
operation and exploration expenditures over the next 12 months (Beginning
January 1, 2009) are summarized as follows:





Description
            PotentialCompletion
      Date
            EstimatedExpenses
              ($)Satisfaction
      of merger agreement debt repayment condition
            12
      months
            150,000Professional
      fees (legal, accounting and auditing fees)
            12
      months
            120,000General and
      administrative expenses
            12
      months
            30,000Total
            
            300,000




23




Our general and
administrative expenses for the year will consist primarily of telephone
service, courier service, postage, office supplies, banking, and website, server
and software maintenance.





Based on our
planned expenditures, we require additional funds of approximately $300,000 to
proceed with our business plan over the next 12 months. If we secure less than
the full amount of financing that we require, we will not be able to complete
our merger with On4 Communications and we will be forced to proceed with an
alternative business plan based on our available financial
resources.





We
anticipate that we will incur substantial losses for the foreseeable future.
Even if we carry out our planned business activities this does not guarantee
that we will generate future sales or revenues.





Even though we plan
to raise capital through equity or debt financing, we believe that the latter
may not be a viable alternative for funding our operations as we do not have
tangible assets to secure any such financing. We anticipate that any additional
funding will be in the form of equity financing from the sale of our common
stock. However, we do not have any financing arranged and we cannot provide any
assurance that we will be able to raise sufficient funds from the sale of our
common stock to finance our operations or planned exploration activities. In the
absence of such financing, we will not be able to purchase non-operated working
interests in existing wells or carry out exploration programs on any acquired
properties. Even if we are successful in obtaining equity financing to fund our
operations and exploration activities, there is no assurance that we will obtain
the amount necessary to pursue the advanced exploration of any acquired
properties following the completion of preliminary exploration. If we do not
continue to obtain financing, we may be forced to abandon our business plan or
our property interests.





We
also hope to obtain additional financing as part of the merger or acquisition
agreement that we are currently negotiating. However, there is no guarantee that
we will enter into a definitive merger or acquisition agreement. If we
successfully complete a merger or acquisition our capital requirements and
business plans may change substantially.





Modifications to
our current plans will be based on many factors, including the results of
product research and development, the assessment of market research, food
production costs, and the amount of available capital. Further, the extent to
which we carry out our business plan is dependent upon the amount of financing
available to us.





We
may also consider entering into joint ventures or other strategic arrangements
to provide the required funding to pursue our business plan. If we enter into a
joint venture arrangement, we would likely have to assign a percentage of our
interest in any revenues or future proprietary products to our joint venture
partner(s). The assignment of this interest would be conditional upon the
contribution of capital by the joint venture partner(s) to enable the
advancement of our business activities. There is no assurance that any third
party would enter into a joint venture agreement with us in order to fund our
business.





We
intend to raise the balance of our cash requirements for the next 12 months
(approximately $300,000) from private placements or a registered public offering
(either self-underwritten or through a broker-dealer). If we are unsuccessful in
raising enough money through future capital-raising efforts, we may review other
financing possibilities such as bank loans. At this time we do not have a
commitment from any broker-dealer to provide us with financing. There is no
assurance that any financing will be available to us or if available, on terms
that will be acceptable to us. We intend to negotiate with our management and
consultants to pay parts of their salaries and fees with stock and stock options
instead of cash.




Going
Concern





We
have generated only nominal revenues and are dependent upon obtaining outside
financing to carry out our operations and pursue any product development,
production or sales. If we are unable to raise equity or secure alternative
financing, we may not be able to continue our operations and our business plan
may fail.





If
our operations and cash flow improve, management believes that we can continue
to operate. However, no assurance can be given that management's actions will
result in profitable operations or an improvement in our liquidity situation.
The threat of our ability to continue as a going concern will cease to exist
only when our revenues have reached a level able to sustain our business
operations.





24




Off-Balance
Sheet Arrangements





We
have no significant off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to stockholders.




Critical
Accounting Policies





Our financial
statements are affected by the accounting policies used and the estimates and
assumptions made by management during their preparation. A complete summary of
these policies is included in Note 1 of the notes to our financial
statements. We have identified below the accounting policies that are of
particular importance in the presentation of our financial position, results of
operations and cash flows, and which require the application of significant
judgment by management.





Revenue
Recognition and Accounts Receivable





Revenue for the
Company is recognized when persuasive evidence of an arrangement exists,
products are delivered, sales price is determinable, and collection is
reasonably assured.  The Company currently does not allow for product
returns.





The Company
establishes an allowance for doubtful accounts to ensure accounts receivable are
not overstated due to accounts that are not collectible.  The Company
maintains a bad debt reserve based on a variety of factors, including the age of
the receivable, payment history, trends and financial condition of customers,
macroeconomic conditions, and significant one-time events.





Foreign
currency translation





Our financial
statements are presented in United States dollars. In accordance with Statement
of Financial Accounting Standards No. 52, “Foreign Currency Translation”,
foreign denominated monetary assets and liabilities are translated into their
United States dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at average rates of
exchange during the year. Gains or losses resulting from foreign currency
transactions are included in results of operations.





Off-Balance
Sheet Arrangements




As
of February 28, 2009, we had no off balance sheet transactions that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.




Inflation




The amounts
presented in the financial statements do not provide for the effect of inflation
on our operations or financial position. The net operating losses shown would be
greater than reported if the effects of inflation were reflected either by
charging operations with amounts that represent replacement costs or by using
other inflation adjustments.





Item 7A. Quantitative and Qualitative
Disclosures about Market Risk





Not
required.





25




Item 8.    Financial Statements and
Supplementary Data




Our fiscal year end
is February 28, 2009. Our audited financial statements as of February 28, 2009
follow.




Sound Revolution,
Inc.


(A
Development Stage Company)


February 28,
2009




Report of Independent Registered Public
      Accounting Firm (Saturna Group LLP)
              F-1Report of Independent Registered Public
      Accounting Firm (Peterson Sullivan LLP)
              F-2Consolidated Balance
Sheets
              F-3Consolidated Statements of
      Operations
              F-4Consolidated Statements of
      Stockholders’ Equity (Deficit)
              F-5Consolidated Statements of Cash
      Flows
              F-6Notes to the Consolidated Financial
      Statements
              F-7


26









REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM








To
the Board of Directors and Shareholders of


Sound Revolution
Inc.


(A
Development Stage Company)





We
have audited the accompanying consolidated balance sheet of Sound Revolution
Inc. (A Development Stage Company) as of February 28, 2009, and the related
consolidated statement of operations, cash flows and stockholders’ deficit for
the year then ended and accumulated from March 1, 2008 to February 28,
2009.  These consolidatedfinancial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. An audit includes 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 internal control over financial reporting.
Accordingly, we express no such opinion. 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
audit provides a reasonable basis for our opinion.





In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
February 28, 2009, and the results of its operations and its cash flows for the
year then ended and accumulated from March 1, 2008 to February 28, 2009, in
conformity with accounting principles generally accepted in the United
States.





The accompanying
consolidated financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note 1 to the financial statements,
the Company has minimal revenues that resulted in a gross loss, has a working
capital deficit, and has incurred operating losses since inception. These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. Management’s plans in regard to these matters are also discussed
in Note 1 to the consolidated financial statements. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.




/s/
SATURNA GROUP LLP





Chartered
Accountants


Vancouver, British
Columbia


April 30,
2009






F-1











REPORTOF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
 
 
 
 To the Board of
Directors and Stockholders
 Sound Revolution,
Inc.
 
 
 We have audited the
accompanying consolidated balance sheet of Sound Revolution, Inc. and
Subsidiaries (a development stage company) as of February 29, 2008, and the
related consolidated statements of operations, comprehensive income (loss),
stockholders' equity, and cash flows for the year ended February 29, 2008,
and for the period from June 4, 2001 (date of inception) to
February 29, 2008.  These consolidated financial statements are
the responsibility of the Company's management.  Our responsibility is
to express an opinion on these consolidated financial statements based on our
audit.
 
 We conducted our
audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Company has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial
reporting.  Our audit 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 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 audit provides a reasonable basis for our opinion.
 
 In our opinion, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Sound Revolution, Inc. and
Subsidiaries (a development stage company) as of February 29, 2008, and the
results of their operations and their cash flows for the year ended February 29,
2008, and for the period from June 4, 2001 (date of inception) to
February 29, 2008, in conformity with accounting principles generally
accepted in the United States.
 
 The accompanying
consolidated financial statements have been prepared assuming the Company will
continue as a going concern.  As discussed in the consolidated
financial statements, the Company has not been able to generate significant
revenue or positive cash flows from operations to date and has an accumulated
deficit at February 29, 2008.  These conditions raise substantial
doubt about the Company's ability to continue as a going
concern.  Management's plans regarding those matters are described in
the consolidated financial statements.  The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 
 /S/
PETERSON SULLIVAN LLP
  June 2,
2008
 Seattle,
Washington




F-2




Sound Revolution,
Inc.


(A
Development Stage Company)


Consolidated Balance Sheets


(Expressed in US
Dollars)





February
      28, 2009
            
            
            February
      29, 2008$
            
            
            $ASSETSCurrent
      AssetsCash
            
            
            3,598
            
            
            
            1,794Prepaid
      expenses
            
            
            7,814
            
            
            
            11,378Total Current
      Assets
            
            
            11,412
            
            
            
            13,172Investment
      (Note 3)
            
            
            –
            
            
            
            10,000Property and
      Equipment (Note 4)
            
            
            6,761
            
            
            
            10,110Website
      Development Costs (Note 4)
            
            
            –
            
            
            
            33,833Music
      Rights
            
            
            342
            
            
            
            342Total
      Assets
            
            
            18,515
            
            
            
            67,457LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      LiabilitiesAccounts
      payable and accrued liabilities
            
            
            49,586
            
            
            
            43,241Due to
      related parties (Note 5)
            
            
            565,390
            
            
            
            443,493Total Current
      Liabilities
            
            
            614,976
            
            
            
            486,734Stockholders’
      DeficitPreferred
      Stock:   10,000,000 share authorized; none
      issued
            
            
            –
            
            
            
            –Common
      Stock:  100,000,000 shares authorized, $0.0001 par
      value
              258,478
      shares issued and outstanding
            
            
            26
            
            
            
            26Additional
      Paid-in Capital
            
            
            352,822
            
            
            
            352,822Common Stock
      Subscribed (Note 6)
            
            
            3,000
            
            
            
            –Deficit
      Accumulated During the Development Stage
            
            
            (952,309
            )
            
            
            (772,125
            )Total
      Stockholders’ Deficit
            
            
            (596,461
            )
            
            
            (419,277
            )Total
      Liabilities and Stockholders’ Deficit
            
            
            18,515
            
            
            
            67,457





Nature of
Operations and Continuance of Business (Note 1)


Commitments (Note
8)


Subsequent Events
(Note 10)




(The accompanying
notes are an integral part of these consolidated financial
statements)




F-3




Sound Revolution,
Inc.


(A
Development Stage Company)


Consolidated Statements of
Operations


(Expressed in US
Dollars)





For
      the
              YearEnded
              February
      28,
            
            For
      the
              YearEnded
              February
      29,
            
            Accumulated
      From
              June
      4, 2001
              (Date
      of Inception)2009
            
            2008
            
            to
      February 28, 2009$
            
            
            $Sales
            
            
            136
            
            
            760
            
            
            5,371Cost of
      sales
            
            
            (246
            )
            
            (1,664
            
            
            (7,596
            )Gross
      Margin
            
            
            (110
            )
            
            (904
            
            
            (2,225
            )ExpensesAmortization
            
            
            38,259
            
            
            62,459
            
            
            118,452Directors
      fees
            
            
            –
            
            
            15,454
            
            
            22,485General and
      administrative
            
            
            9,374
            
            
            29,219
            
            
            158,730Management
      fees (Note 5)
            
            
            25,000
            
            
            100,019
            
            
            281,007Marketing
            
            
            16,008
            
            
            48,795
            
            
            72,980Professional
      fees
            
            
            81,433
            
            
            28,391
            
            
            235,367Research and
      development
            
            
            –
            
            
            714
            
            
            77,629Total
      Expenses
            
            
            170,074
            
            
            285,051
            
            
            966,650Operating
      Loss
            
            
            (170,184
            )
            
            (285,955
            
            
            (968,875
            )Other Income
      (Expense)Gain on
      write-off of debt
            
            
            –
            
            
            88,718
            
            
            88,718Impairment of
      investment (Note 3)
            
            
            (10,000
            )
            
            –
            
            
            (10,000
            )Interest
      expense
            
            
            –
            
            
            (34,384
            
            
            (61,977
            )Loss on sale
      of subsidiary
            
            
            –
            
            
            (175
            
            
            (175
            )Net
      Loss
            
            
            (180,184
            )
            
            (231,796
            
            
            (952,309
            )Net Loss Per
      Share – Basic and Diluted
            
            
            (0.70
            )
            
            (0.90Weighted
      Average Shares Outstanding
            
            
            258,444
            
            
            258,150




(The accompanying notes are an
integral part of these consolidated financial statements)




F-4




Sound Revolution,
Inc.


(A
Development Stage Company)


Consolidated Statements of Stockholders’ Equity
(Deficit)


For the Period from
June 4, 2001 (Date of Inception) to February 28, 2009




Common
            
            Additional
            
            DeficitCommon
      Stock
            
            Stock
            
            Paid-in
            
            AccumulatedDuring theShares
            
            Amount
            
            Subscribed
            
            Capital
            
            DevelopmentStage
            
            Total#
            
            $
            
            $
            
            $
            
            $
            
            $Balance –
      June 4, 2001 (Date of Inception)
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            –Issuance of
      common stock for cash:June 15,
      2001
            
            
            190,476
            
            
            19
            
            
            –
            
            
            781
            
            
            –
            
            
            800June 27,
      2001
            
            
            47,619
            
            
            5
            
            
            –
            
            
            7,249
            
            
            –
            
            
            7,254August 31,
      2001
            
            
            167
            
            
            –
            
            
            –
            
            
            905
            
            
            –
            
            
            905Net loss for
      the period
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (9,351
            )
            
            (9,351
            )Balance -
      February 28, 2002
            
            
            238,262
            
            
            24
            
            
            –
            
            
            8,935
            
            
            (9,351
            )
            
            (392
            )Net loss for
      the year
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (2,773
            )
            
            (2,773
            )Balance –
      February 28, 2003
            
            
            238,262
            
            
            24
            
            
            –
            
            
            8,935
            
            
            (12,124
            )
            
            (3,165
            )Net loss for
      the year
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (2,069
            )
            
            (2,069
            )Balance –
      February 29, 2004
            
            
            238,262
            
            
            24
            
            
            –
            
            
            8,935
            
            
            (14,193
            )
            
            (5,234
            )Issuance of
      common stock for cash, July 2004
            
            
            5,912
            
            
            1
            
            
            –
            
            
            49,662
            
            
            –
            
            
            49,663Issuance of
      common stock for services
            
            
            345
            
            
            –
            
            
            –
            
            
            2,900
            
            
            –
            
            
            2,900Net loss for
      the year
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (42,380
            )
            
            (42,380
            )Balance –
      February 28, 2005
            
            
            244,519
            
            
            25
            
            
            –
            
            
            61,497
            
            
            (56,573
            )
            
            4,949Issuance of
      common stock for services
            
            
            1,985
            
            
            –
            
            
            –
            
            
            25,004
            
            
            –
            
            
            25,004Net loss for
      the year
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (68,578
            )
            
            (68,578
            )Balance –
      February 28, 2006
            
            
            246,504
            
            
            25
            
            
            –
            
            
            86,501
            
            
            (125,151
            )
            
            (38,625
            )Issuance of
      common stock for services
            
            
            5,539
            
            
            –
            
            
            –
            
            
            95,904
            
            
            –
            
            
            95,904Issuance of
      common stock for research and development
            
            
            653
            
            
            –
            
            
            –
            
            
            11,728
            
            
            –
            
            
            11,728Issuance of
      common stock for debt settlement
            
            
            72
            
            
            –
            
            
            –
            
            
            1,000
            
            
            –
            
            
            1,000Issuance of
      common stock for capital equipment
            
            
            538
            
            
            –
            
            
            –
            
            
            13,560
            
            
            –
            
            
            13,560Stock-based
      compensation expense
            
            
            –
            
            
            –
            
            
            –
            
            
            90,343
            
            
            –
            
            
            86,500Net loss for
      the year
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (415,178
            )
            
            (415,178
            )Balance –
      February 28, 2007
            
            
            253,306
            
            
            25
            
            
            –
            
            
            299,036
            
            
            (540,329
            )
            
            (241,268
            )




(The accompanying notes are an
integral part of these consolidated financial statements)




F-5




Sound Revolution,
Inc.


(A
Development Stage Company)


Consolidated
Statements of Stockholders’ Equity (Deficit)


For the Period from
June 4, 2001 (Date of Inception) to February 28, 2009





Common
            Additional
            DeficitCommon
      Stock
            Stock
            Paid-in
            AccumulatedDuring theShares
            Amount
            Subscribed
            Capital
            DevelopmentStage
            Total#
            $
            $
            $
            $
            $Balance –
      February 28, 2007
            253,306
            25
            –
            299,036
            (540,329)
            (241,268)Issuance of
      stock options for management services, March 2007
            –
            –
            –
            10,622
            –
            10,622Issuance of
      common stock for management services, April 2007
            3,571
            1
            –
            22,499
            –
            22,500Issuance of
      stock options for directors’ fees, May 2007
            –
            –
            –
            6,297
            –
            6,297Issuance of
      common stock for consulting services, June 2007
            763
            –
            –
            7,368
            –
            7,368Issuance of
      common stock for directors’ fees, July 2007
            350
            –
            –
            5,000
            –
            5,000Issuance of
      common stock for directors’ fees, September 2007
            454
            –
            –
            2,000
            –
            2,000Net loss for
      the year
            –
            –
            –
            –
            (231,796)
            (231,796)Balance –
      February 29, 2008
            258,444
            26
            –
            352,822
            (772,125)
            (419,277)Proceeds from
      common stock subscribed
            –
            –
            3,000
            –
            –
            3,000Net loss for
      the year
            –
            –
            –
            –
            (180,184)
            (180,184)Balance –
      February 28, 2009
            258,444
            26
            3,000
            352,822
            (952,309)
            (596,461)




(The accompanying notes are an
integral part of these consolidated financial statements)





F-6




Sound Revolution,
Inc.


(A
Development Stage Company)


Consolidated Statements of Cash Flows


(Expressed in US
Dollars)




For
      the Year
              Ended
              February
      28,
            
            
            For
      the Year
              Ended
              February
      29,
            
            
            Accumulated
      From
              June
      4, 2001
              (Date
      of Inception)2009
            
            
            2008
            
            
            to
      February 28, 2009$
            
            
            $
            
            
            $Operating
      ActivitiesNet loss for
      the period
            
            
            (180,184
            )
            
            
            (231,796
            )
            
            
            (952,309
            )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesAmortization
            
            
            38,259
            
            
            
            62,459
            
            
            
            118,452Gain on
      settlement of debt
            
            
            –
            
            
            
            (88,718
            )
            
            
            (88,718
            )Impairment of
      investment
            
            
            10,000
            
            
            
            –
            
            
            
            10,000Shares issued
      for services
            
            
            –
            
            
            
            36,868
            
            
            
            164,941Stock options
      issued in exchange for services
            
            
            –
            
            
            
            16,919
            
            
            
            109,726Changes in
      operating assets and liabilitiesPrepaid
      expenses
            
            
            3,564
            
            
            
            17,675
            
            
            
            (7,814
            )Accounts
      payable and accrued liabilities
            
            
            6,345
            
            
            
            75,430
            
            
            
            139,304Due to
      related parties
            
            
            –
            
            
            
            34,411
            
            
            
            61,032Net Cash Used
      In Operating Activities
            
            
            (122,016
            )
            
            
            (76,752
            )
            
            
            (445,386
            )Investing
      ActivitiesPurchase of
      music rights
            
            
            –
            
            
            
            –
            
            
            
            (291
            )Purchase of
      property and equipment
            
            
            –
            
            
            
            –
            
            
            
            (14,818
            )Website
      development costs
            
            
            (1,077
            )
            
            
            (86,131
            )
            
            
            (96,887
            )Investment
            
            
            –
            
            
            
            –
            
            
            
            (10,000
            )Net Cash Used
      In Investing Activities
            
            
            (1,077
            )
            
            
            (86,131
            )
            
            
            (121,996
            )Financing
      ActivitiesAdvances from
      related parties
            
            
            121,897
            
            
            
            157,703
            
            
            
            504,358Proceeds from
      share subscriptions
            
            
            3,000
            
            
            
            –
            
            
            
            3,000Proceeds from
      issuance of common stock
            
            
            –
            
            
            
            –
            
            
            
            63,622Net Cash
      Provided By Financing Activities
            
            
            124,897
            
            
            
            157,703
            
            
            
            570,980Increase
      (Decrease) in Cash
            
            
            1,804
            
            
            
            (5,180
            )
            
            
            3,598Cash -
      Beginning of Period
            
            
            1,794
            
            
            
            6,974
            
            
            
            –Cash - End of
      Period
            
            
            3,598
            
            
            
            1,794
            
            
            
            3,598Non-cash
      Investing and Financing ActivitiesCommon stock
      issued for property and equipment
            
            
            –
            
            
            
            –
            
            
            
            13,560Common stock
      issued for debt settlement
            
            
            –
            
            
            
            –
            
            
            
            1,000Supplemental
      DisclosuresInterest
      paid
            
            
            –
            
            
            
            –
            
            
            
            1,082Income taxes
      paid
            
            
            –
            
            
            
            –
            
            
            
            –






(The
accompanying notes are an integral part of these consolidated financial
statements)




F-7




Sound Revolution
Inc.


(A Development
Stage Company)


Notes to the Consolidated Financial
Statements


(Expressed in US
Dollars)




1.
              Nature
      of Operations and Continuance of
Business




Sound Revolution,
Inc. (the "Company"), was incorporated under the laws of the State of Delaware.
While the Company sponsored one marketing event to promote its intended purpose
in fiscal year 2004 and has begun to realize nominal revenues from its website,
it continues to be in the development stage. The Company is planning to pursue
the business of providing tools and services for music distribution and
promotion and is currently designing a website for this purpose. The Company has
two wholly-owned subsidiaries: (i) Sound Revolution Recordings, Inc., which was
incorporated in British Columbia, Canada on June 20, 2001, for the purpose of
carrying on music marketing services in British Columbia, and (ii) Charity
Tunes, Inc., which was incorporated in the State of Delaware on June 27, 2005,
for the purpose of operating a website for the distribution of songs
online.




The Company is in
the development stage and has not yet developed a commercially viable product or
generated significant revenues from their business activities. As at February
28, 2009, the Company has a working capital deficit of $603,564, and has
incurred an accumulated deficit since inception of $952,309.  These
factors raise substantial doubt about the Company's ability to continue as a
going concern.  The Company will need to raise additional working
capital to continue its’ business activities.  The accompanying
consolidated financial statements do not include any adjustments to the recorded
assets or liabilities that might be necessary should the Company fail in any of
the above objectives and is unable to operate for the coming year.




On
April 7, 2009, the Company entered into a plan of merger with On4 Communications
Inc. (“On4”) to acquire the common shares of On4.  The plan of merger
is subject to certain conditions that must be attained, with the intent to
continue operations as On4 Communications Inc.  Refer to Note
10(a).




2.
            Summary
      of Significant Accounting
Principles




Basis of Presentation and
Principles of Consolidation




These consolidated
financial statements are prepared in conformity with accounting principles
generally accepted in the United States and are presented in US dollars and
include the accounts of the Company and its subsidiaries, Sound Revolution
Recordings, Inc., and Charity Tunes, Inc. All inter-company accounts and
transactions have been eliminated. The Company’s fiscal year end is February
28.




Use of
Estimates




The preparation of
these consolidated financial statements in conformity with U.S. 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 consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. The Company regularly evaluates estimates and assumptions
related to the useful life and recoverability of long lived assets, stock-based
compensation and deferred income tax asset valuation allowances. The Company
bases its estimates and assumptions on current facts, historical experience and
various other factors that it believes to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities and the accrual of costs and expenses that are
not readily apparent from other sources. The actual results experienced by the
Company may differ materially and adversely from the Company’s estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.




Cash and Cash
Equivalents




The Company
considers all highly liquid instruments with maturity dates of three months or
less at the time of issuance to be cash equivalents.




Property and
Equipment




Property and
equipment, consists of office equipment, is stated at cost and is amortized
using the straight-line method over the estimated lives of the related assets of
five


years.




Music
Rights




In
February 2003, the Company purchased for $298 (Cdn $400) the rights to represent
a musician artist in the release of his first musical album. The artist is also
an officer of the Company. Music rights include non-inclusive use of and
distribution rights to the songs in various multi-media formats from the
musician's first album. The music rights will be tested at least annually for
impairment. There has been no impairment of music rights in any of the periods
presented. The cost of the music rights will be expensed upon the release of the
musician's first album and realization of the related royalties. The cost of
music rights will not be carried beyond expiration of the license term on August
31, 2009. Changes in foreign exchange rates since acquisition increased the
carrying cost to $342.





F-8




Sound
Revolution Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in
US Dollars)


2.      Summary
of Significant Accounting Principles (Continued)




Website Development
Costs




Website development
costs are accounted for in accordance with Emerging Issues Task Force EITF 00-2,
“Accounting for Web Site
Development Costs,” with applicable guidance from AICPA statement of
Position 98-1, “Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use.”
The Company’s internal website development processes are relatively short-term
in nature. The costs incurred in the preliminary stages of development are
expenses as incurred. Once an application has reached the development stage,
internal and external costs, if direct and incremental, will be capitalized and
amortized, on a straight-line basis over the estimated useful life, if
management believes such costs are significant. Maintenance and enhancement
costs are typically expensed as incurred unless such costs relate to substantial
upgrades and enhancements to the website that result in added functionality in
which case the costs will be capitalized and amortized on a straight-line basis,
over the estimated useful life, if management believes such costs are
significant.




Website development
costs are amortized using the straight-line method over the estimated useful
life of one year.




Impairment of Long-Lived
Assets




In
accordance with SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, management tests long-lived assets to be
held and used for recoverability whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. No impairment of
intangible assets was recorded during 2009 and 2008.




Research and
Development




Research and
development costs are expensed as incurred.




Revenue
Recognition




The Company
recognizes revenue from the online sale music in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial
Statements.” The Company accounts for revenue as a principal using the
guidance in EITF 99-19, “Reporting Revenue Gross as a
Principal vs. Net as an Agent”. Revenue consists of the sale of music and
is recognized only when the price is fixed or determinable, persuasive evidence
of an arrangement exists, the product is shipped, and collectability is
reasonably assured.




Earnings Per
Share




The Company
computes net income (loss) per share in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 128, "Earnings per Share"(“SFAS
128”). SFAS 128
requires presentation of both basic and diluted earnings per share (EPS) on the
face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti-dilutive.




Foreign Currency
Translation




The Company’s
functional currency is the Canadian dollar and its reporting currency is the
United States dollar. The financial statements of the Company are translated to
United States dollars in accordance with SFAS No. 52 “Foreign Currency
Translation”, using the exchange rate prevailing at the balance sheet
date.  Gains and losses arising on translation or settlement of
foreign currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily undertaken
in Canadian dollars.




Comprehensive
Loss




SFAS No. 130,
“Reporting Comprehensive
Income,” establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements. As at August
31, 2008 and 2007, the Company has no items representing comprehensive income or
loss.





F-9




Sound Revolution
Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in US
Dollars)


2.      Summary
of Significant Accounting Principles (Continued)




Financial Instruments and
Fair Value Measures




SFAS No. 157, “Fair Value Measurements”
requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. SFAS No. 157 establishes a
fair value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instrument’s
categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. SFAS No. 157
prioritizes the inputs into three levels that may be used to measure fair
value:




Level
1




Level 1 applies to
assets or liabilities for which there are quoted prices in active markets for
identical assets or liabilities.




Level
2




Level 2 applies to
assets or liabilities for which there are inputs other than quoted prices that
are observable for the asset or liability such as quoted prices for similar
assets or liabilities in active markets; quoted prices for identical assets or
liabilities in markets with insufficient volume or infrequent transactions (less
active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable
market data.




Level
3




Level 3 applies to
assets or liabilities for which there are unobservable inputs to the valuation
methodology that are significant to the measurement of the fair value of the
assets


or
liabilities.




The Company’s
financial instruments consist principally of cash, accounts payable and accrued
liabilities, amounts due to related parties, and notes payable to a related
party. Pursuant to SFAS No. 157, the fair value of our cash and cash equivalents
is determined based on “Level 1” inputs, which consist of quoted prices in
active markets for identical assets. We believe that the recorded values of all
of our other financial instruments approximate their current fair values because
of their nature and respective maturity dates or durations.




The Company’s
operations are in Canada, which results in exposure to market risks from changes
in foreign currency rates. The financial risk is the risk to the Company’s
operations that arise from fluctuations in foreign exchange rates and the degree
of volatility of these rates. Currently, the Company does not use derivative
instruments to reduce its exposure to foreign currency risk.




Income
Taxes




The Company
accounts for income taxes using the asset and liability method in accordance
with SFAS No. 109, “Accounting
for Income Taxes”. The asset and liability method provides that deferred
tax assets and liabilities are recognized for the expected future tax
consequences of temporary differences between the financial reporting and tax
bases of assets and liabilities, and for operating loss and tax credit
carry-forwards. Deferred tax assets and liabilities are measured using the
currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce
deferred tax assets to the amount that is believed more likely than not to be
realized.




Stock Based
Compensation




The Company records
stock-based compensation in accordance with SFAS No. 123R, “Share Based Payments”, using
the fair value method.




All transactions in
which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. Equity instruments issued to employees
and the cost of the services received as consideration are measured and
recognized based on the fair value of the equity instruments
issued.





F-10


Sound Revolution
Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in US
Dollars)


2.      Summary
of Significant Accounting Principles (Continued)




Recent Accounting
Pronouncements




In
June 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff
Position EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities”. FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings
per Share.” FSP EITF 03-6-1 is effective for financial statements issued
for fiscal years beginning on or after December 15, 2008 and earlier adoption is
prohibited. The adoption of this statement is not expected to have a material
effect on the Company’s consolidated financial statements.




In
May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS
No. 163 requires that an insurance enterprise recognize a claim liability prior
to an event of default when there is evidence that credit deterioration has
occurred in an insured financial obligation. It also clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim liabilities,
and requires expanded disclosures about financial guarantee insurance contracts.
It is effective for financial statements issued for fiscal years beginning after
December 15, 2008, except for some disclosures about the insurance enterprise’s
risk-management activities. SFAS No. 163 requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier
application is not permitted. The adoption of this statement is not expected to
have a material effect on the Company’s consolidated financial
statements.




In
May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. The adoption
of this statement is not expected to have a material effect on the Company’s
consolidated financial statements.




In
March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”. SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years beginning after November 15, 2008, with early
adoption encouraged. The adoption of this statement is not expected to have a
material effect on the Company’s consolidated financial statements.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. SFAS
No. 141 (revised 2007) establishes principles and requirements for how the
acquirer of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree. SFAS No. 141 (revised 2007) also provides guidance for
recognizing and measuring the goodwill acquired in the business combination and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. SFAS No. 141 (revised 2007) will become effective for the fiscal
year beginning after December 15, 2008. The adoption of this statement is not
expected to have a material effect on the Company’s consolidated financial
statements.




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. SFAS No.
160 establishes accounting and reporting standards for the non-controlling
interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No.
160 will become effective for the fiscal year beginning after December 15, 2008.
The adoption of this statement is not expected to have a material effect on the
Company’s consolidated financial statements.





F-11


Sound
Revolution Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in
US Dollars)


2.      Summary
of Significant Accounting Principles (Continued)





Comparative
Figures




Certain comparative
figures have been reclassified in order to conform to the current year’s
financial statement presentation.





3.
            Investment




On
September 21, 2006, the Company entered into a Wholesale Digital Download and
Master Tone agreement (the “Agreement”) with CD Baby, Inc. (“CD Baby”) to obtain
the rights to sell music songs and ring tones.  Under the initial
terms of the Agreement, the Company will pay $0.10 per music song or ring tone
and, upon sale of the songs by the Company, a royalty payment of 60-70% of gross
proceeds to CD Baby.  The Agreement was for a period of one-year with
annual extensions granted on a year-to-year basis under the same terms and
conditions until notice of cancellation by either party.  As at
February 29, 2008, the Company had purchased 100,000 songs from CD Baby for
$10,000.




On
September 21, 2008, the Agreement was cancelled and the Company impaired the
carrying value of $10,000 of its investment with CD Baby.




4. Property
and Equipment and Website Development Costs


Accumulated
            February
      28, 2009
            February
      29, 2008Cost
            Amortization
            Net
      CarryingValue
            Net
      CarryingValue$
            $
            $
            $Equipment
            16,745
            9,984
            6,761
            10,110Website
      Development Costs
            108,626
            108,626
            –
            33,833125,371
            118,610
            6,761
            43,943




5.
            Related
      Party Transactions




a)
            During the
      year ended February 28, 2009, a former director of the Company received
      $25,000 (2008 - $83,100) in management fees pursuant to a management
      agreement. As at February 28, 2009, $Nil (2008 - $2,250) is owed to this
      individual.




b)
            As at
      February 28, 2009, the Company has an outstanding note payable of $565,390
      (2008 - $440,993) to the President of the Company.  The note
      payable is unsecured, non-interest bearing, and due on
      demand.  Prior to March 1, 2008, the note payable was due
      interest at 10% per annum and the outstanding note payable includes
      accrued interest of $61,032.




6.
            Common
      Stock




a)
            During the
      year ended February 28, 2009, the Company received $3,000 of share
      subscriptions for common shares of the Company that were issued subsequent
      to year-end.  Refer to Note
10(b).




b)
            On June 10,
      2008, the Company completed a reverse stock split on the basis of one new
      share of common stock in exchange for every forty-two old shares of common
      stock outstanding. All per share amounts have been retroactively restated
      to reflect the reverse stock split. The Company also increased its
      authorized capital from 100,000,000 to 110,000,000 shares of which
      100,000,000 shares of the total authorized capital is common stock and
      10,000,000 shares is preferred
stock.




c)
            On September
      5, 2007, the Company issued 454 shares of common stock with a fair value
      of $2,000 for director services.




d)
            On July 16,
      2007, the Company issued 350 shares of common stock with a fair value of
      $5,000 for director services.




e)
            On June 15,
      2007, the Company issued 763 shares of common stock with a fair value of
      $7,368 for consulting services.




f)
            On April 11,
      2007, the Company issued 3,571 shares of common stock with a fair value of
      $22,500 for management services
provided.


F-12
 Sound
Revolution Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in
US Dollars)
 7. Stock
Options




In
March 2007, the Company granted an aggregate of 2,380 split-adjusted stock
options to a director in exchange for management services rendered. The value of
the stock options vested during the year ended February 29, 2008 was determined
using the Black-Scholes option pricing model and the following assumptions:
expected option life of 2 years, a risk free interest rate of 4.27%, a dividend
yield of 0%, and volatility of 179%. Compensation expense of $10,622 was charged
to operations during the year ended February 29, 2008.




During the year
ended February 29, 2008, pursuant to a management agreement, the Company agreed
to issue stock options to management.  During the year ended February
29, 2008, the Company granted and issued 1,191 split-adjusted stock
options.   The fair value of the stock options were determined
using the Black-Scholes option pricing model using an expected option life of 2
years, a risk free interest rate of 4.53%, a dividend yield of 0%, and
volatility of 172%.  For the year ended February 29, 2008, the Company
recorded stock-based compensation expense of $6,297 relating to these stock
options.




The following table
summarizes the continuity of the Company’s stock options:




Shares
              #
            Weighted
      Average
              Exercise
      Price
              $
            Weighted
      AverageRemaining
              ContractualLife
      (years)
              #
            Aggregate
              IntrinsicValue
              $Outstanding
      and Exercisable, February 28, 2007
            6,548
            32.34
            1.83
            –Granted
            3,571
            72.24
            1.14
            –Exercised
            –
            –
            –
            –Cancelled
      / Expired
            (2,381)
            9.66
            –
            –Outstanding
      and Exercisable, February 29, 2008
            7,738
            66.15
            0.73
            –Granted
            –
            –
            –
            –Exercised
            –
            –
            –
            –Cancelled
      / Expired
            (5,357)
            48.89
            –
            –Outstanding
      and Exercisable, February 28, 2009
            2,381
            105.00
            0.10
            –




Additional
information regarding stock options as of February 28, 2009, is as
follows:




Number
      of
              Options
            ExercisePrice
              $
            Expiry
              Date
            Weighted
      Average Remaining Contractual Life
              (years)2,381
            105.00
            April 4,
      2009
            0.10




As
at February 28, 2009, the weighted average fair value of the stock options
granted was $nil (2008 - $9,181).  There are no unvested stock
options.




8.
            Commitments




a) On
January 3, 2008, the Company, through its wholly owned subsidiary Charity Tunes
Inc., entered into an Agency and Promotion agreement (the “Agreement”) with
World Wildlife Fund Canada (“WWF-Canada”) to raise money and awareness of
WWF-Canada’s cause through the participation in promotional programs with
Charity Tunes. The term of the agreement is one year, extended from year to year
with a termination notice of 30 days prior to the end of a term by either
party.




The Company will
collect an amount equal to a minimum of 10% of the purchase price of a song or
other digital content or products sold in its website for which purchasers
select WWF-Canada as the recipient of the donation. Donations collected will be
forwarded to WWF-Canada every calendar quarter if donations owed by Charity
Tunes are at least $100.




F-13


Sound
Revolution Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in
US Dollars)


8.     
Commitments (continued)




b)
            On July 10,
      2007, the Company entered into a consulting agreement (the “Agreement”)
      with Velocity Communications Ltd. (“Velocity”). Pursuant to the Agreement,
      Velocity will create and implement a comprehensive investor and public
      relations strategy for the Company for the North American market. The term
      of the Agreement is for 12 months. In consideration for Velocity’s
      services, the Company will compensate Velocity with 10,000 restricted
      common shares per month during the term of the Agreement, payable in
      advance. The Company will also pay to Velocity a flat fee of $1,500 per
      month to cover all expenses. If the Agreement is terminated by either of
      the parties, any compensation paid to Velocity and not accrued at the time
      of termination will be refundable to the Company. At May 6, 2008, Velocity
      had not provided any services to the Company and the agreement was
      terminated.




c)
            On October
      10, 2007, the Company entered into an amendment agreement with Puretracks
      Inc. (“Puretracks”), whereby the Company agreed to pay to Puretracks,
      effective as of August 29, 2007, CDN$0.09 per track and CDN$1.08 per album
      downloaded from the Company’s Charity Tunes website in Canada and $0.08
      per track and $0.96 per album downloaded from the Company’s Charity Tunes
      website in the United States.





9.
            Income
      Taxes




The Company has
$674,100 of net operating losses carried forward to offset taxable income in
future years which expire commencing in fiscal 2010.  The income tax
benefit differs from the amount computed by applying the US federal income tax
rate of 34% to net loss before income taxes for the years ended February 28,
2009 and February 29, 2008 as a result of the following:




2009
              $
            2008
              $Net loss
      before taxes
            (180,184)
            (231,796)Statutory
      rate
            34%
            34%Expected tax
      recovery
            (61,200)
            (78.800)Non-deductible
      expenses
            13,000
            27,000Change in
      valuation allowance
            48,200
            51,800Income tax
      provision
            –
            –





The significant
components of deferred income tax assets and liabilities as at February 28, 2009
and February 29, 2008, after applying enacted corporate income tax rates, are


as
follows:





2009
              $
            2008
              $Net operating
      losses carried forward
            228,200
            180,000Valuation
      allowance
            (228,200)
            (180,000)Net deferred
      tax asset
            –
            –




The Company has
incurred operating losses of $674,100 which, if unutilized, will expire through
to 2029. Future tax benefits, which may arise as a result of these losses, have
not been recognized in these consolidated financial statements, and have been
offset by a valuation allowance. The following table lists the fiscal year in
which the loss was incurred and the expiration date of the
operating:




Period
      Incurred
              Net
      OperatingLoss
                $
              ExpiryDate2003
              12,900
              20232004
              1,600
              20242005
              43,800
              20252006
              64,500
              20262007
              256,900
              20272008
              152,400
              20282009
              142,000
              2029674,100




F-14




Sound Revolution
Inc.
 (A Development
Stage Company)
 Notes to the
Consolidated Financial Statements
 (Expressed in US
Dollars)


10.
            Subsequent
      Events




a)
            Merger Agreement with
      On4 Communications Inc.




On
April 7, 2009, the Company entered into a merger agreement (the “Merger
Agreement”) with On4 Communications, Inc. (“On4”), a company in the business of
manufacturing


two-way
communication devices.




In
order to close the merger:




·
            Both parties
      shall submit the merger to a vote of their shareholders and obtain
      approval from holders of a majority of both parties’ respective voting
      shares;




·
            The Company
      shall enter into a convertible note agreement (the “Note”) in the amount
      of $120,000 with the President of the Company, which shall be convertible
      into common stock at $0.10 per share at the option of the holder, and
      which shall be due in seven months from the date of
      Agreement.  The Note will be reduced to $100,000 if On4 incurs
      legal fees in excess of $10,000 in connection with the
    merger;




·
            The Company
      will convert debt owed to the President of the Company into 35,000,000
      shares of its common stock at a price of $0.001 per share (the “Control
      Shares”);




·
            The Company
      will have transferred all of its assets and debts, other than the Note and
      any debt owing to the President of the Company, to its wholly owned
      subsidiary, Charity Tunes Inc.; and




·
            The Company
      will not have issued any securities other than the Note and the Control
      Shares, unless such issuance had been approved in writing by
      On4.




Upon the merger
closing the following shall apply to the surviving entity (the “New
Entity”):




·
            It shall
      adopt the articles and bylaws of the Company, and the name of the
      surviving entity shall be Sound Revolution
Inc.;




·
            The New
      Entity shall raise a minimum of $150,000 through a direct offering of
      units registered on a Form S-1 at a price to be determined by the New
      Entity,  with each unit comprised of one common share and one
      half warrant to purchase one common share at a price of $1.00 for a period
      of one year;




·
            All notes
      payable by On4 in excess of $100,000 shall be converted to equity at a
      price to be mutually agreed on by On4 and the specific creditor or receive
      a repayment extension of no less than six months and with an annual
      interest rate not to exceed 12%.




After raising a
minimum of $150,000:




·
            The New
      Entity shall repay $150,000 of the debt owed to the President of the
      Company;




·
            Charity Tunes
      Inc. shall be sold to a company owned and controlled by the President of
      the Company, which shall assume the entire amount of loan owing to the
      President of the Company, exclusive of the
Note;




·
            The New
      Entity shall change its name to On4 Communications,
  Inc.;




·
            The President
      of the Company and all companies controlled by the President will cancel
      all but 236,066 of the Company’s shares owned by
  them;




·
            Other than
      the Note, all debts of the Company shall be
  extinguished.




b)
            Issuance of Common
      Stock




On
March 12, 2009, the Company issued 13,000,000 common shares at $0.001 per share
to various investors for total consideration of $13,000.




On
March 12, 2009, the Company entered into a debt conversion agreement with the
President of the Company, for the conversion of $20,000 of debt owed by the
Company to the President into common shares of the Company at $0.001 per share
for an aggregate total of 20,000,000 common shares of the Company.




F-15




Item 9.    Changes In and
Disagreements with Accountants on Accounting and Financial
Disclosure





The accounting firm
of Peterson Sullivan LLP, Certified Public Accountants, audited our financial
statements for the years ended February 28, 2007 and February 29,
2008.  On April 9, 2009 we dismissed Peterson Sullivan and engaged
Saturna Group Chartered Accountants LLP as our new independent registered public
account firm.  During the fiscal years ended February 29, 2008 and
February 28, 2009 and through April 9, 2009, there have been no disagreements
with Peterson Sullivan LLP on any mater of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Peterson Sullivan LLP would
have caused it to make reference thereto in connection with its report on the
financial statements for such years.





There have been no
changes in or disagreements with our accounting firm on accounting and financial
disclosure.





Item 9A. Controls and
Procedures





Evaluation of Disclosure
Controls and Procedures





We
maintain disclosure controls and procedures, as defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that such information is accumulated
and communicated to our management, including our President, (who is our
Principal Executive and Financial Officer), as appropriate to allow timely
decisions regarding required disclosure.





We
carried out an evaluation, under the supervision and with the participation of
our management, including our President, of the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2008.
Based on the evaluation of these disclosure controls and procedures, and in
light of the material weaknesses found in our internal controls over financial
reporting, the Principal Executive and Financial Officer concluded that our
disclosure controls and procedures were not effective.





Management
Report





Our management is
responsible for establishing and maintaining effective internal control over
financial reporting.  Under the supervision of our sole executive
officer, we conducted an evaluation of the effectiveness of our internal control
over financial reporting as of February 28, 2009 using the criteria established
in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).




27




A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. In its assessment of the
effectiveness of internal control over financial reporting as of February 28,
2009, we determined that there were significant deficiencies that constituted
material weaknesses, as described below.




1.
            Certain
      entity level controls establishing a “tone at the top” were considered
      material weaknesses. We not have a majority of independent directors and
      thus no audit committee. There is no policy on fraud.  A
      whistleblower policy is not necessary given the small size of the
      organization. There is no code of ethics.2.
            There is a
      lack of monitoring of internal control as the company is in the
      development stage and has limited resources.3.
            There is no
      segregation of duties as we have no employees. The potential for
      management override exists as our sole officer oversees all aspects of our
      operations. The lack of independent directors exercising an oversight role
      further increases the risk of management
  override.





Management is
currently evaluating remediation plans for the above control
deficiencies.





In
light of the existence of these control deficiencies, management concluded that
there is a reasonable possibility that a material misstatement of the annual or
interim financial statements will not be prevented or detected on a timely basis
by the company’s internal controls.





As
a result, management has concluded that we did not maintain effective internal
control over financial reporting as of February 28, 2009 based on criteria
established in Internal
Control—Integrated Frameworkissued by COSO.





Saturna Group
Chartered Accountants LLP, an independent registered accountant, was not
required to and has not issued a report concerning the effectiveness of our
internal control over financial reporting as of February 28, 2009.




Changes in Internal
Control





During the quarter
ended February 28, 2009 there were no changes in our internal control over
financial reporting that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.





Item 9B.  Other
Information





None.




28




PART III




Item 10.  Directors, Executive Officers
and Corporate Governance.





Directors and
Officers




Our bylaws allow
the number of directors to be fixed by the Board of Directors. Our Board of
Directors has fixed the number of directors at three.




Our current
directors and officers are as follows:





Name
            Age
            PositionPenny
      Green
            37
            Director,
      President, Chief Executive Officer, Chief Financial Officer, Principal
      Accounting Officer, Secretary and TreasurerCatherine
      LeBlanc
            34
            DirectorCameron
      Robb
            39
            Director





Our current
directors will serve as such until our next annual shareholder meeting or until
their successors are appointed. Our current executive officers hold their
positions at the will of our Board of Directors. There are no arrangements,
agreements or understandings between non-management security holders and
management under which non-management security holders may directly or
indirectly participate in or influence the management of our
affairs.




Penny Green,President, Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer, Secretary and
Treasurer




Penny Green is the
founder of the Company and served as its President and Chief Executive Officer
from June 5, 2001 to March 15, 2004, from May 30, 2005 to March 30, 2007, and
from September 8, 2008 to September 15, 2008.  She also served as the
Company’s Secretary from June 5, 2001 to March 15, 2004 and from June 15, 2004
to September 15, 2008, as well as its Treasurer and a director from June 5, 2001
to September 15, 2008.  In addition, Ms. Green acted as the Company’s
Chief Financial Officer from August 11, 2004 to September 15, 2008 and its
Chairman from March 15, 2004 to September 15, 2008.





Ms. Green is the
managing attorney of the law firm Bacchus Corporate and Securities
Law.  She has been practicing law for more than 12 years, and founded
the firm approximately 10 years ago. She is called as an attorney is the State
of Washington and the Province of British Columbia, and is a member of the
Washington State Bar Association, the American Bar Association, the Law Society
of British Columbia and the Canadian Bar Association.





Ms. Green is
currently the Chief Financial Officer and a director of China Fiber Fuels Inc.,
a private company engaged in the cultivation of jatropha curcas plants and seeds
in Southwesten China for the production of biodiesel.  She is also the
Chief Financial Officer of Highbury Biofuel Technologies Inc., a private company
involved in commercializing technologies for producing high-efficiency wood
waste-based biofuels, promoting the reduction of greenhouse gas emissions and
replacing non-renewable fossil fuel resources.




Catherine
LeBlanc, Director
  Catherine LeBlanc
has over 10 years of business experience focused in the area of human resources
management, including strategic business partnering, organizational
effectiveness and labor relations. She presently serves as a human resources
manager for Transcontinental Inc., North America’s sixth largest printer, a
position she has held since 2006. From 2003 through 2005, Ms. LeBlanc was a
human resources manager for Teletech, a company providing international customer
management, business-process and database-marketing solutions. She has also held
positions at Bombardier Aerospace and Molson Inc. Ms. LeBlanc’s experience
includes collective bargaining and project management. She is an active member
of the Human Resources Professional Association of Ontario.




29




Cameron
Robb, Director




Cameron Robb
co-founded PetsMobility in June 2004 and On4 Communications in June 2006. He has
been acting Chief Executive Officer and a Director of both organizations since
their inceptions. Mr. Robb operated an executive management consultancy through
which he advised private and public companies on matters such as venture capital
and finance, international sales, and marketing. His clients represented diverse
industries such as entertainment, technology, energy, and consumer products. He
was President and CEO and co-founder of Wooket Graphics, Inc, a North American
entertainment and licensing company. Currently, in addition to his work with On4
and PetsMobility, Mr. Robb serves as an Advisory Board Member for the Canada
Arizona Business Council, Firstar Sports, Inc, and serves as a Board Member on
For The Earth Corporation. He is also a mentor to Arizona State University
students in the Technopolis Program, established to help ASU become a more
responsive and entrepreneurial university. Mr. Robb is 39 years of
age.




Other than as
disclosed above, our directors currently do not serve on the boards of other
public companies.




Significant
Employees




There are no
individuals other than our executive officers who make a significant
contribution to our business.





Family
Relationships




There are no family
relationships among our officers or directors.





Legal
Proceedings




None of our
directors, executive officers, promoters or control persons has been involved in
any of the following events during the past five years:




·
            any
      bankruptcy petition filed by or against any business of which such person
      was a general partner or executive officer either at the time of the
      bankruptcy or within two years prior to that
  time;




·
            any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);




·
            being subject
      to any order, judgment, or decree, not subsequently reversed, suspended or
      vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or




·
            being found
      by a court of competent jurisdiction (in a civil action), the SEC or the
      Commodity Futures Trading Commission to have violated a federal or state
      securities or commodities law, and the judgment has not been reversed,
      suspended, or vacated.





Section
16(a) Beneficial Ownership Compliance Reporting





Section 16(a) of
the Securities Exchange Act of 1934 requires a company’s directors and officers,
and persons who own more than ten-percent (10%) of the company’s common stock,
to file with the Securities and Exchange Commission reports of ownership on Form
3 and reports of change in ownership on Forms 4 and 5. Such officers, directors
and ten-percent stockholders are also required to furnish the company with
copies of all Section 16(a) reports they file. Based solely on our review of the
copies of such forms received by us and on written representations from certain
reporting persons, we believe that all Section 16(a) reports applicable to our
officers, directors and ten-percent stockholders with respect to the fiscal year
ended December 31, 2008 were filed.





30




Code
of Ethics




We
have not yet adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions because we have not yet
finalized the content of such a code. Companies whose equity securities are
quoted on the OTC Bulletin Board are not currently required to implement a code
of ethics.




Director
Nominees





As
of May 5, 2009 there have been no material changes to the procedures by which
security holders may recommend nominees to our Board of Directors.





We
do not have a nominating committee. Our Board of Directors selects individuals
to stand for election as members of the Board. Since the Board of Directors does
not include a majority of independent directors, the decision of the Board as to
director nominees is made by persons who have an interest in the outcome of the
determination. The Board will consider candidates for directors proposed by
security holders, although no formal procedures for submitting candidates have
been adopted. Unless otherwise determined, not less than 90 days prior to the
next annual meeting of the Board of Directors at which the slate of Board
nominees is adopted, the Board will accept written submissions of proposed
nominees that include the name, address and telephone number of the proposed
nominee; a brief statement of the nominee’s qualifications to serve as a
director; and a statement as to why the security holder submitting the proposed
nominee believes that the nomination would be in the best interests of security
holders. If the proposed nominee is not the same person as the stockholder
submitting the name of the nominee, a letter from the nominee agreeing to the
submission of his or her name for consideration should be provided at the time
of submission. The letter should be accompanied by a résumé supporting the
nominee's qualifications to serve on the Board of Directors, as well as a list
of references.





The Board
identifies director nominees through a combination of referrals from different
people, including management, existing Board members and security holders. Once
a candidate has been identified, the Board reviews the individual's experience
and background and may discuss the proposed nominee with the source of the
recommendation. If the Board believes it to be appropriate, Board members may
meet with the proposed nominee before making a final determination whether to
include the proposed nominee as a member of management's slate of director
nominees submitted to security holders for election to the Board.




Among the factors
that the Board considers when evaluating proposed nominees are their knowledge
of and experience in business matters, finance, capital markets and mergers and
acquisitions. The Board may request additional information from any candidate
prior to reaching a determination. The Board is under no obligation to formally
respond to all recommendations, although as a matter of practice, it will
endeavor to do so.





Audit
Committee




The functions of
the Audit Committee are currently carried out by our Board of
Directors.  Our Board of Directors has determined that we do not
presently need an audit committee financial expert on our Board of Directors
carrying out the duties of the Audit Committee.  Our Board of
Directors has determined that the cost of hiring a financial expert to act as
one of our directors and to be a member of the Audit Committee or otherwise
perform Audit Committee functions outweighs the benefits of having a financial
expert on the Audit Committee.





31




Item 11.  Executive
Compensation.




The following
Summary Compensation Table sets forth the total annual compensation paid or
accrued by us to or for the account of the Principal Executive Officer (“PEO”)
and our Principal Financial Officer (“PFO”). None of our other executive
officers received compensation in excess of $100,000 during the fiscal year
ended February 28, 2009.




Summary
Compensation




Name and Principal Position
              Fiscal
      Year
              Salary
                ($)
              Bonus
                ($)
              Stock
                Awards
                ($)
              Option
                Awards
                ($)
              Non-Equity
                Incentive
                Plan
                Compensation
                ($)
              Non-qualified
                Deferred
                Compensation
                Earnings
                ($)
              All
                Other
                Compensation
                ($)
              Total
                ($)Penny Green, President, Chief Executive
      Officer, Principal Accounting Officer, Secretary, Treasurer and Director
      (1)
              2009
              0
              0
              0)
              0
              0
              0
              0
              02008
              0
              0
              0
              0
              0
              0
              0
              0Catherine
      LeBlanc (2)
              2009
              0
              0
              0
              0
              0
              0
              0
              02008
              0
              0
              0
              0
              0
              0
              0
              0Robin Ram (3)
              2009
              25,000
              0
              0
              0
              0
              0
              0
              25,0002008
              63,500
              19,600
              22,500
              10,622
              0
              0
              0
              116,222 (4)




(1) Penny Green
served as President and Chief Executive Officer of Sound Revolution from June 4,
2001 to March 15, 2004, from June 1, 2005 to March 30, 2007, from September 2008
to September 14, 2008 and again from February 9, 2009 to present.  Ms.
Green also served as Secretary, Treasurer and Director of Sound Revolution from
June 4, 2001 to September 14, 2008, again from February 9, 2009.  Ms
Green has also held the title of Chief financial officer from August 11, 2004 to
September 14, 2008, and from February 9, 2009 to present, and principal
accounting officer from February 9, 2009 to present.




(2) Catherine
LeBlanc served as our President, Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer, Secretary and Treasurer from September
15, 2008 to February 9, 2009.  Ms. LeBlanc has also served as a
Director of Sound Revolution since September 15, 2008.





(3) Mr. Ram was
appointed as chief operating officer and chief marketing officer of Sound
Revolution on June 19, 2006 and December 1, 2006, respectively, which post he
held until March 30, 2007. From March 30, 2007 to September 8, 2008, Mr. Ram
served as our President and Chief Executive Officer. Mr. Ram has also served as
a Director of Sound Revolution from June 26, 2006 to September 8,
2008.




(4)
      Represents management fees paid to Mr. Ram for his services as Chief
      Operating Officer and Chief Marketing Officer of Sound Revolution and,
      subsequent to March 30, 2007, for services as our President and Chief
      Executive Officer.




Employment
Agreements





On
June 19, 2006 we entered into a management agreement with our then Chief
Operating Officer and Chief Marketing Officer, Robin Ram. This agreement was
amended on March 20, 2007 upon Mr. Ram’s resignation as the Chief Operating
Officer and Chief Marketing Officer and his appointment as the company’s Chief
Executive Officer and President. The agreement provided for a one-year term with
automatic one-year renewal periods, and could be terminated on 60 days notice by
either party. After one year, the notice period increased to 120 days. Mr. Ram
resigned as our President, Chief Executive Officer and Director on September 8,
2008 and the agreement was terminated.





Other than as
described above, there are no agreements between us and any of our officers,
directors or employees regarding their services to Sound
Revolution.





Pension, Retirement or
Similar Benefit Plans




There are no
arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers. We have no material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of the Board of Directors or a committee
thereof.




Compensation
Committee




We
currently do not have a compensation committee of the Board of Directors. The
Board of Directors as a whole determines executive compensation.




Compensation of
Directors




We
do not pay members of the Board of Directors any fees for attendance at the
Board meetings or similar remuneration or reimburse them for any out-of-pocket
expenses incurred by them in connection with our business.





32




Compensation Committee
Report




Our Principal
Executive and Financial Officer reviewed the Compensation Discussion and
Analysis and the requirements pertaining to this item. She has determined that
no disclosure is necessary as we have not adopted any compensation programs and
we have approved that a statement to that effect be disclosed in this Form
10-K.





Item 12.  Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters.





Neither we nor our
wholly owned subsidiary have any compensation plans or individual compensation
arrangements under which our securities are authorized for issuance to either
employees or non-employees.





The following table
sets forth the ownership, as of May 27, 2009, of our common stock by each of our
directors, by all of our executive officers and directors as a group and by each
person known to us who is the beneficial owner of more than 5% of any class of
our securities. As of May 27, 2009, there were 96,213,567 shares of our common
stock issued and outstanding. All persons named have sole or shared voting and
investment control with respect to the shares, except as otherwise noted. The
number of shares described below includes shares which the beneficial owner
described has the right to acquire within 60 days of the date of this annual
report.




Title
      of Class
            Name
      and Address ofBeneficial
      Owner
            Amount
      andNature
      of
              BeneficialOwnership
            Percent
      of
              ClassEXECUTIVE
      OFFICERS AND DIRECTORS AS A GROUPCommon
            Penny Green
      (1)
              1820- 925
      West Georgia Street
              Vancouver,
      British Columbia
              Canada  V6C
      3L2
            55,186,066
      (2)
            57%
              (6)Common
            Catherine
      LeBlanc (3)
              7 Vancouver
      Street, Suite 207
              Barrie,
      Ontario
              Canada  L4M
      4M1
            0
            0%
              (6)Common
            Robin Ram
      (4)
              78 Cliffwood
      Dr
              Port Moody,
      British Columbia
              Canada  V3H
      5M1
            5,954
            0%
              (6)(7)Common
            Cameron Robb
      (5)
              15615 N.71st
      Street
              Scottsdale,
      Arizona
              USA  85254
            15,850,000
      (8)
            16%
              (6)All
      Executive Officers and Directors as a Group
            71,042,020
            74%
      (6)5%
      BENEFICIAL OWNERSCommon
            On4
      Communications. Inc.(6)
            15,850,000
            16%All
      5% Beneficial Owners
            15,850,000
            16%




1.
            Penny Green
      is our President, Chief Executive Officer, Chief Financial Officer,
      Principal Accounting Officer, Secretary, Treasurer and
      Director.




2.
            Catherine
      LeBlanc is our Director and former President, Chief Executive Officer,
      Chief Financial Officer, Principal Accounting Officer, Secretary, and
      Treasurer.




3.
            Includes
      43,208 shares held by Ms. Green and 55,142,858 shares held by Bacchus
      Entertainment Ltd. a company over which Ms. Green has voting and
      dispositive control.




4.
            Robin Ram is
      our former Director, Chief Executive Officer and
  President.




5.
            Cameron Robb
      is our Director.




6.
            Calculated
      based on issued and outstanding shares of 96,213,567as of May 27,
      2009.




7.
            Less than
      1%




8.
            Includes
      15,800,000 shares of our common stock held by On4 Communications, Inc.
      (Canada), a Canada corporation over which Mr. Robb shares voting and
      dispositive control.




33




Item 13.  Certain Relationships and Related
Transactions, and Director Independence





During the year
ended February 28, 2009, we paid $25,000 in management fees to Robin Ram, our
former director, President and Chief Executive Officer. The payments were made
pursuant to a management agreement between us and Mr. Ram dated June 19, 2006
and amended on March 20, 2007.  On September 8, 2008, Mr. Ram resigned
as a director and officer of Sound Revolution and the agreement was
terminated.




On
May 30, 2008 Penny Green and Bacchus Entertainment Ltd. entered into an
agreement with us whereby all monies and interest owed by us to Bacchus
Entertainment were assigned to Penny Green. Under the agreement the parties
agreed that no further interest will be charged on any outstanding balance of
the monies loaned and we shall pay the full amount of the loan, being $415,560
as of May 30, 2008, on demand to Penny Green.




Director
Independence





The OTC Bulletin
Board on which our common stock is quoted on does not have any director
independence requirements. We also do not have a definition of independence as
our sole director is also employed in management positions as an executive
officer. Once we engage further directors and officers, we plan to develop a
definition of independence and scrutinize our Board of Directors with regard to
this definition.





Item 14.  Principal Accounting Fees and
Services




Audit,
Audit-Related and Non-Audit Fees




The following table
sets forth the fees for professional audit services and the fees billed for
other services rendered by our former auditors, Peterson Sullivan, LP, and our
current auditors, Saturna Group Chartered Accountants LLP, in connection with
the audit of our financial statements for the years ended February 28, 2008 and
2009, and any other fees billed for services rendered by our auditors during
these periods.





AUDIT, AUDIT-RELATED AND NON-AUDIT FEESDescription
      of Service
            Fees
      (March 1, 2008 to February 28, 2009)
              ($)
            Fees
      (March 1, 2007 to February 29, 2008)
              ($)Audit
      fees
            19,400
            27,000Audit-related
      fees
            -
            -Tax
      fees
            -
            -All other
      fees
            -
            -Total
            19,400
            27,000




Audit
Committee Approval





Since our
inception, our Board of Directors, performing the duties of the audit committee,
has reviewed all audit and non-audit related fees at least annually. The Board,
acting as the audit committee, pre-approved all audit related services for the
year ended February 28, 2009.




34




Part IV





Item 15.  Exhibits, Financial Statement
Schedules





The financial
statement schedules are omitted because they are inapplicable or the requested
information is shown in our financial statements or related notes
thereto.





Exhibits





ExhibitNumber
            ExhibitDescription3.1
            Certificate
      of Merger dated May 1, 2009 incorporated by reference as Exhibit 3.1 of
      our Report on Form 8-K filed on May 7, 200910.1
            Merger
      Agreement with On4 Communications, Inc. dated April 7, 2009 incorporated
      by reference as Exhibit 10.1 of our Report on Form 8-K filed on April 13,
      200910.2
            Convertible
      Note Agreement with Bacchus Entertainment Ltd. dated April 30, 2009
      incorporated by reference as Exhibit 10.2 of our Report on Form 8-K filed
      on May 7, 200910.3
            Debt
      Conversion Agreement with Bacchus Entertainment Ltd. dated April 30, 2009
      incorporated by reference as Exhibit 10.3 of our Report on Form 8-K filed
      on May 7, 200931.1
            Certification of the Principal Executive and Principal
      Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act
      pursuant to Section 302 of the Sarbanes-Oxley Act of
    200232.1
            Certification of Principal Executive and Principal
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of
  2002








35




SIGNATURES





Pursuant to the
requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly
caused this Annual Report to be signed on its behalf by the undersigned
thereunto duly authorized.





SOUND
REVOLUTION INC.








Date:  May
      29, 2009
            By:
            /s/
      Penny GreenPenny
      GreenPresident,
      Chief Executive Officer, Chief Financial Officer, Principal Accounting
      Officer, Secretary, Treasurer,
Director








Pursuant to the
requirements of 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/
      Penny Green
                  Penny Green
                President,
      Chief Executive Officer, Chief Financial Officer, Principal Accounting
      Officer, Secretary, Treasurer, Director
                May 29,
      20009/s/
      Catherine LeBlanc
                Director
                May
      29, 2009Catherine
      LeBlanc/s/
      Cameron Robb
                Director
                May
      29, 2009Cameron
      Robb




36