---

UNITED STATES**SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 
  For the quarterly period ended March 31, 2007

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
  THE EXCHANGE ACT 
  For the transition period from __________ to __________

Commission file number 333-120382

FSONA SYSTEMS CORP.(Exact
name of small business issuer as specified in its charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

11120 Horseshoe Way, Suite 140, Richmond, British
Columbia, Canada V7Q 5H7(Address of principal executive offices)

604.273.6333(Issuer's telephone number)

Not Applicable(Former name, former address
and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
  for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. Yes
  [X]    No [   ]

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports required
  to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
  of securities under a plan confirmed by a court. Yes [   ]    No [ 
   ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: 39,078,905 common
  shares issued and outstanding as of May 15, 2007

Transitional Small Business Disclosure Format (Check one): Yes
  [   ]     No [X]

---

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

It
is the opinion of management that the interim financial statements for the
quarter ended March 31, 2007 include all adjustments necessary in order to
ensure that the interim financial statements are not misleading.

Our
interim financial statements are stated in United States dollars and are
prepared in accordance with United States generally accepted accounting
principles.

---

3







Consolidated Financial Statements

Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
(expressed in US dollars) March 31, 2007 and December 31,
2006

---

4

Fsona Systems Corp. (formerly Matrix Ventures, Inc.)
CONSOLIDATED BALANCE SHEETS (See Basis of Presentation - Note 1)
(expressed in US dollars)

|                                          |  | March 31,   |   |  | December 31, |  
|----------------------------------------- |  | ----------- | - |  | ------------ | -
|                                          |  | 2007        |   |  | 2006         |  
|                                          |  | $           |   |  | $            |  
|                                          |  | (Unaudited) |   |  |              |  
|                                          |  |             |   |  |              |  
|ASSETS                                    |  |             |   |  |              |  
|Current assets                            |  |             |   |  |              |  
|Cash                                      |  | 57,030      |   |  | 187,474      |  
|Accounts receivable                       |  | 167,320     |   |  | 566,784      |  
|Goods and services tax refundable         |  | 17,373      |   |  | 14,520       |  
|Prepaid and other current assets          |  | 40,072      |   |  | 104,680      |  
|Deferred cost of sales                    |  | -           |   |  | 43,313       |  
|Inventory [note
      4]                  |  | 708,702     |   |  | 499,130      |  
|Total current assets                      |  | 990,497     |   |  | 1,415,901    |  
|Inventory [note 4]                        |  | 422,796     |   |  | 519,520      |  
|Property, plant and equipment             |  | 18,062      |   |  | 19,547       |  
|                                          |  | 1,431,355   |   |  | 1,954,968    |  
|                                          |  |             |   |  |              |  
|LIABILITIES AND CAPITAL DEFICIT           |  |             |   |  |              |  
|Current liabilities                       |  |             |   |  |              |  
|Accounts payable                          |  | 293,073     |   |  | 398,080      |  
|Accrued liabilities                       |  | 476,012     |   |  | 483,216      |  
|Accrued royalty                           |  | 57,077      |   |  | 54,840       |  
|Deferred tax liability                    |  | 218,503     |   |  | 223,950      |  
|Current portion of loans payable [note 5] |  | 4,433,253   |   |  | 4,353,962    |  
|Customer deposits and deferred revenue    |  | 363,458     |   |  | 444,011      |  
|Total
      liabilities                   |  | 5,841,376   |   |  | 5,958,059    |  
|                                          |  |             |   |  |              |  
|Capital deficit                           |  |             |   |  |              |  
|Capital stock [note 6]                    |  | 39,079      |   |  | 20,076       |  
|Additional paid-in capital                |  | 179,542     |   |  | 251,345      |  
|Accumulated other comprehensive loss      |  |             |   |  |              |  
|-cumulative translation adjustment        |  | (106,374    | ) |  | (65,126      | )
|Accumulated deficit                       |  | (4,522,268  | ) |  | (4,209,386   | )
|Total capital
      deficit               |  | (4,410,021  | ) |  | (4,003,091   | )
|                                          |  | 1,431,355   |   |  | 1,954,968    |  

SEE ACCOMPANYING NOTES

---

5

Fsona Systems Corp. (formerly Matrix Ventures, Inc.)CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited - expressed in US dollars)

|                                                        |  | For the      |   |  | For the      |  
|------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                        |  | three-month  |   |  | three-month  |  
|                                                        |  | period ended |   |  | period ended |  
|                                                        |  | March 31,    |   |  | March        |  
|                                                        |  | 2007         |   |  | 2006         |  
|                                                        |  | $            |   |  | $            |  
|                                                        |  |              |   |  |              |  
|Sales [note 7]                                          |  | 458,674      |   |  | 288,287      |  
|Cost of sales                                           |  | 356,111      |   |  | 204,499      |  
|Gross profit                                            |  | 102,563      |   |  | 83,788       |  
|                                                        |  |              |   |  |              |  
|Operating expenses                                      |  |              |   |  |              |  
|Sales and marketing                                     |  | 168,429      |   |  | 231,251      |  
|Research and development                                |  | 138,786      |   |  | 150,263      |  
|General and administrative                              |  | 152,628      |   |  | 136,982      |  
|Depreciation of property, plant and equipment           |  | 1,644        |   |  | 631          |  
|Gain on disposal
      of property, plant and equipment |  | -            |   |  | (130         | )
|Total operating expenses                                |  | 461,487      |   |  | 518,997      |  
|                                                        |  |              |   |  |              |  
|Loss from operations                                    |  | (358,924     | ) |  | (435,209     | )
|                                                        |  |              |   |  |              |  
|Other income (expense)                                  |  |              |   |  |              |  
|Interest income                                         |  | 1,866        |   |  | 1,387        |  
|Interest and bank charges                               |  | (1,125       | ) |  | (785         | )
|Foreign exchange gain (loss)                            |  | 39,854       |   |  | (9,458       | )
|Total other (expense) income                            |  | 40,595       |   |  | (8,856       | )
|                                                        |  |              |   |  |              |  
|Loss for period before income tax                       |  | (318,329     | ) |  | (444,065     | )
|                                                        |  |              |   |  |              |  
|Deferred income tax recovery                            |  | 5,447        |   |  | 8,395        |  
|                                                        |  |              |   |  |              |  
|Loss for the period                                     |  | (312,882     | ) |  | (435,670     | )
|                                                        |  |              |   |  |              |  
|Foreign currency translation                            |  | (41,248      | ) |  | (18,231      | )
|Comprehensive loss                                      |  | (354,130     | ) |  | (453,901     | )
|                                                        |  |              |   |  |              |  
|Loss per share  basic and diluted                      |  | (0.01        | ) |  | (0.51        | )
|                                                        |  |              |   |  |              |  
|Weighted average shares outstanding  basic and diluted |  | 30,633,095   |   |  | 894,040      |  

SEE ACCOMPANYING NOTES

---

6

FsonaSystemsCorp.(formerlyMatrixVentures,Inc.)CONSOLIDATEDSTATEMENTSOFCHANGESINCAPITALDEFICIT(Unaudited-expressedin USdollars)

Additional
      
      
      Cumulative
      
      
      
      
      
      TotalCommon
        stock
      
      
      paid in
      
      
      Translation
      
      
      Accumulated
      
      
      CapitalShares
      
      
      Amount
      
      
      Capital
      
      
      Adjustment
      
      
      deficit
      
      
      deficit#
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Balance at January 1, 2007
      8,904,860
      
      
      8,905
      
      
      262,516
      
      
      (65,126
      )
      
      (4,209,386
      )
      
      (4,003,091
      )Adjustment for the issuance of common stock
        onrecapitalization
        (note 3 and note 6)
      11,170,975
      
      
      11,171
      
      
      (11,171
      )
      
      
      
      
      
      
      
      20,075,835
      
      
      20,076
      
      
      251,345
      
      
      (65,126
      )
      
      (4,209,386
      )
      
      (4,003,091
      )Adjustment to capital deficit of the Company at therecapitalization date (note 3)
      19,003,070
      
      
      19,003
      
      
      (71,803
      )
      
      
      
      
      
      
      
      (52,800
      )39,078,905
      
      
      39,079
      
      
      179,542
      
      
      (65,126
      )
      
      (4,209,386
      )
      
      (4,055,891
      )Foreign exchange translation adjustment
      
      
      
      
      
      
      
      
      
      (41,248
      )
      
      
      
      
      (41,248
      )Net loss for the period
      
      
      
      
      
      
      
      
      
      
      
      (312,882
      )
      
      (312,882
      )Balance at March 31, 2007
      39,078,905
      
      
      39,079
      
      
      179,542
      
      
      (106,374
      )
      
      (4,522,268
      )
      
      (4,410,021
      )


SEE ACCOMPANYING NOTES

---

7

Fsona Systems Corp. (formerly Matrix Ventures, Inc.)CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited - expressed in US dollars)

|                                                                      |  | For the      |   |  | For the      |  
|--------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                      |  | three-month  |   |  | three-month  |  
|                                                                      |  | period ended |   |  | period ended |  
|                                                                      |  | March 31,    |   |  | March 31,    |  
|                                                                      |  | 2007         |   |  | 2006         |  
|                                                                      |  | $            |   |  | $            |  
|OPERATING ACTIVITIES                                                  |  |              |   |  |              |  
|Net loss                                                              |  | (312,882     | ) |  | (435,670     | )
|Adjustments to reconcile net loss to net cash
      used in operating |  |              |   |  |              |  
|activities                                                            |  |              |   |  |              |  
|Depreciation of property, plant
      and equipment                   |  | 1,644        |   |  | 631          |  
|Provision for warranties                                              |  | 17,087       |   |  | 11,457       |  
|Deferred income tax recovery                                          |  | (5,447       | ) |  | (8,395       | )
|Gain on disposal of property, plant and equipment                     |  | -            |   |  | (130         | )
|Foreign exchange gain (loss)                                          |  | (39,854      | ) |  | 9,458        |  
|Changes in operating assets and liabilities                           |  |              |   |  |              |  
|Accounts receivable                                                   |  | 400,054      |   |  | 8,339        |  
|Goods and services tax receivable                                     |  | (2,685       | ) |  | 15,954       |  
|Prepaid and other current assets                                      |  | 64,824       |   |  | 63,717       |  
|Deferred cost of sales                                                |  | 43,313       |   |  | (21,745      | )
|Inventory                                                             |  | (102,118     | ) |  | 50,066       |  
|Accounts payable                                                      |  | (159,640     | ) |  | (125,341     | )
|Accrued liabilities                                                   |  | (11,774      | ) |  | (45,486      | )
|Customer deposits and deferred revenue                                |  | (83,721      | ) |  | (14,550      | )
|Accrued royalty                                                       |  | 1,724        |   |  | 1,162        |  
|Net cash used in operating activities                                 |  | (189,475     | ) |  | (490,533     | )
|INVESTING ACTIVITIES                                                  |  |              |   |  |              |  
|Acquisition of property, plant and equipment                          |  | -            |   |  | (433         | )
|Sale of short term investments                                        |  |              |   |  | 130          |  
|Due to related party                                                  |  | -            |   |  | (10,369      | )
|Net cash used in investing activities                                 |  | -            |   |  | (10,672      | )
|FINANCING ACTIVITIES                                                  |  |              |   |  |              |  
|Proceeds from loans payable                                           |  | 79,212       |   |  | 265,308      |  
|Net cash provided by financing activities                             |  | 79,212       |   |  | 265,308      |  
|Effect of foreign exchange rate on changes in cash                    |  | (20,181      | ) |  | (19,160      | )
|Decrease in cash                                                      |  | (110,263     | ) |  | (235,897     | )
|Cash at the beginning
      of the period                             |  | 187,474      |   |  | 278,379      |  
|Cash, at the end of the period                                        |  | 57,030       |   |  | 23,322       |  
|                                                                      |  |              |   |  |              |  
|Supplementary information                                             |  |              |   |  |              |  
|Cash interest paid                                                    |  | 1,125        |   |  | 785          |  
|Cash interest received                                                |  | 1,866        |   |  | 1,387        |  
|Non-cash investing and financing activities:                          |  |              |   |  |              |  
|Shares issued for recapitalization (note 3)                           |  | 52,800       |   |  | -            |  

SEE ACCOMPANYING NOTES

---

8

Fsona Systems Corp. (formerly Matrix Ventures, Inc.)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)

March 31, 2007 and December 31, 2006

1.NATURE OF
BUSINESS AND BASIS OF PRESENTATION

Nature of business

Matrix was incorporated under the laws of the State of Nevada,
on February 2, 2004 as Matrix Ventures Inc. On February 9, 2007 the Company
closed the transaction contemplated in the Share Exchange Agreement (the
Agreement) dated February 8, 2007 with Fsona Systems Corp. (Fsona), a
company incorporated under the laws of the state of Nevada on August 10, 2005.
Under the Agreement, the Company agreed to acquire all of the issued and
outstanding shares of Fsona in exchange for 20,075,835 common shares of the
Company. As of the closing date, the former stockholders of Fsona held
approximately 51% of the issued and outstanding common shares of the Company.
The acquisition of Fsona was recorded as a reverse acquisition for accounting
purposes. Fsona, the acquired entity, is regarded as the predecessor entity as
of February 9, 2007 and the Company adopted the year end of Fsona, being
December 31. In accordance with the provisions governing the accounting for
reverse acquisitions, the comparative figures presented as at December 31, 2006
and March 31, 2006 are those of Fsona.

The Company previously focused its business efforts on the
acquisition, exploration, development and exploitation of mineral and oil and
gas properties. In contemplation of the share exchange transaction with Fsona,
the Company abandoned its original business plan. As of the closing date of the
Agreement, the Company commenced the business of developing, manufacturing and
marketing Free Space Optical (FSO) communication devices to be used in various
communications applications. The Company plans to continue to generate revenues
through sales of its FSO communication devices.

Effective April 13, 2007, the Company completed a merger with
their subsidiary, Fsona Systems Corp. As a result, the Company has changed their
name from Matrix Ventures, Inc. to Fsona Systems Corp. to better reflect the
direction and business of the Company subsequent to the closing of the share
exchange agreement that was entered into among, the Company, Fsona Systems
Corp., and the shareholders of Fsona Systems Corp., as reported on the current
report on Form 8-K filed on February 13, 2007.

On April 13, 2007, the Company rolled forward the issued and
outstanding shares of the Company on an 8.23 for one basis. The effect of the
stock split has been applied on a retroactive basis to all related disclosures
and calculations in these consolidated financial statements.

Basis of presentation

These interim consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States of
America, and include the accounts of the Company and its wholly-owned
subsidiary, Fsona Systems (Operating) Inc. All significant inter-company
transactions have been eliminated on consolidation.

These accompanying interim consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization
of assets and satisfaction of liabilities and commitments in the normal course
of business. At March 31, 2007, the Company has negative working capital and has
a consolidated accumulated deficit of $4,522,268 as at March 31, 2007. The
continuation of the Company is dependent upon the continuing financial support
of creditors and stockholders as well as achieving a profitable level of
operations. The Company plans to raise additional equity and debt capital as
necessary to finance the operating and capital requirements of the Company.

---

9

Fsona Systems Corp. (formerly Matrix Ventures, Inc.)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)

March 31, 2007 and December 31, 2006

1.      NATURE OF BUSINESS AND
BASIS OF PRESENTATION (contd)

The Company, has negative working capital, has incurred losses
since its inception, and has no assurance of future profitability. The Company
will continue to require financing from external sources to finance its
operating and investing activities until sufficient positive cash flows from
operations can be generated.

The Company had cash on hand of $57,030 at March 31, 2007.
Management anticipates that it requires approximately $1,002,000 over the next
twelve months ended March 31, 2008 to carry out its plans. While the Company is
expending its best efforts to achieve the above plans, there is no assurance
that any such activity will generate funds for operations. To the extent that
cash needs are not achieved from operating cash flow or existing cash on hand,
the Company plans to raise necessary cash through equity issuances and/or debt
financing. The Company plans to manage its resources and assets on hand and
pursue opportunities for further long-term financing, as well as achieving and
maintaining a profitable level of operations. Assets on hand and any additional
amounts raised will be used for further development of the Companys products
and for other working capital purposes. There is no assurance that further
financing or profitable business will be achieved, accordingly, there is
substantial doubt about the Companys ability to continue as a going concern.
The Companys financial statements do not include any adjustments related to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that may be necessary should the Company be unable
to continue in existence.

Interim Financial Statements

The interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal
recurring adjustments, which in the opinion of management, are necessary for
fair presentation of the information contained therein. It is suggested that
these interim financial statements be read in conjunction with the audited
financial statements of Fsona for the years ended December 31, 2006 and 2005
included in the Companys Current Report on Amendment No. 1 to Form 8-K. The
Company follows the same accounting policies in the preparation of interim
reports.

Results of operations for the interim periods are not
necessarily indicative of annual results.

2.      SIGNIFICANT ACCOUNTING
POLICIES

Recent accounting pronouncements

SFAS No. 155

In February 2006, FASB issued SFAS No. 155, Accounting for
Certain Hybrid Financial Instruments  an Amendment of FASB Statements No. 133
and 140. Among other things, SFAS No. 155 permits the election of fair value
remeasurement for certain hybrid financial instruments that would otherwise
require bifurcation under Statement 133, Accounting for Derivative Instruments
and Hedging Activities. These hybrid financial instruments would include both
assets and liabilities. SFAS No. 155 is effective for fiscal years beginning
after September 15, 2006. There was no material impact to the Companys
consolidated financial statements upon adoption of this new pronouncement.

---

10

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

2.      SIGNIFICANT ACCOUNTING
POLICIES (contd)

SFAS No. 154

In June 2005, the FASB issued Statement of Financial Accounting
Standard No. 154, Accounting Changes and Error Corrections, a replacement of
APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting
Accounting Changes in Interim Financial Statements (SFAS 154). The Statement
applies to all voluntary changes in accounting principle, and changes the
requirements for accounting for and reporting of a change in accounting
principle. SFAS 154 requires retrospective application to prior periods
financial statements of a voluntary change in accounting principle unless it is
impracticable. SFAS 154 requires that a change in method of depreciation,
amortization, or depletion for long-lived, non-financial assets be accounted for
as a change in accounting estimate that is affected by a change in accounting
principle. Opinion 20 previously required that such a change be reported as a
change in accounting principle. SFAS 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
The Company has determined the adoption of this pronouncement did not have a
material impact on the Companys financial statements.

SFAS No. 157

In September 2006, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standard (SFAS) No. 157,
Fair Value Measurements (FAS 157). FAS 157 defines fair value, establishes a
framework for measuring fair value in accordance with generally accepted
accounting principles, and expands disclosures about fair value measurements.
The provisions of FAS 157 are effective fiscal years beginning after November
15, 2007. The Company is currently evaluating the impact of the provisions of
SFAS No. 157.

FIN 48

In June 2006, FASB issued interpretation No. 48, Accounting
for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (FAS
No. 109) (FIN 48). This interpretation prescribes a recognition threshold and
measurement attribute for tax positions taken or expected to be taken in a tax
return. This interpretation also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. FIN 48 uses a two-step approach for evaluating tax
positions. The first step, recognition, occurs when an enterprise concludes that
a tax position, based solely on its technical merits, is more likely than not to
be sustained upon examination. The second step, measurement, is only addressed
if the recognition threshold is met; under this step, the tax benefit is
measured as the largest amount of the benefit, determined on a cumulative
probability basis, that is more likely than not to be realized upon settlement.
FIN 48s use of the term more likely than not represents a greater than 50
percent likelihood of occurrence.

The cumulative effect of applying the provisions of this
Interpretation shall be reported as an adjustment to the opening balance of
retained earnings for fiscal year in which the enterprise adopts the
Interpretation. FIN 48 is effective for fiscal years beginning after December
15, 2006. Earlier application is permitted if the reporting enterprise has not
publicly issued financial statements, including interim financial statements,
for that fiscal year. Accordingly, the Company adopted the provisions of this
Interpretation in the current quarter ended March 31, 2007. There was no
material impact to the Companys consolidated financial statements upon adoption
of this new pronouncement.

---

11

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

**2.      SIGNIFICANT ACCOUNTING
POLICIES (contd)**

SAB 108

In September 2006, the SEC issued Staff Accounting Bulletin No.
108, "Considering the Effects of Prior Year Misstatements when quantifying
Misstatements in Current Year Financial Statements" ("SAB 108"). SAB 108
requires companies to evaluate the materiality of identified unadjusted errors
on each financial statement and related financial statement disclosure using
both the rollover approach and the iron curtain approach. The rollover approach
quantifies misstatements based on the amount of the error in the current year
financial statements whereas the iron curtain approach quantifies misstatements
based on the effects of correcting the misstatement existing in the balance
sheet at the end of the current year, irrespective of the misstatements year(s)
of origin. Financial statements would require adjustment when either approach
results in quantifying a misstatement that is material. Correcting prior year
financial statements for immaterial errors would not require previously filed
reports to be amended. SAB 108 is effective for fiscal years ending after
November 15, 2006 (the Company's fiscal year ending December 31, 2006). The
Company has determined that SAB 108 did not have a material impact on its
financial statements.

3.RECAPITALIZATION

On February 8, 2007, the Company entered into a Share Exchange
Agreement (the Agreement), among the Company, Fsona, and the former
stockholders of Fsona.

The closing of the transactions contemplated in the Agreement
and the acquisition of all of the issued and outstanding common stock of Fsona
occurred on February 9, 2007. In accordance with the closing of the share
exchange agreement, the Company issued 20,075,835 common shares to the former
stockholders of Fsona for all of the 8,904,860 issued and outstanding common
shares of Fsona on the basis of 2.2544805 common shares of the Company for every
one common share of Fsona.

The acquisition was accounted for using the purchase method of
accounting as applicable to reverse acquisitions, as the former stockholders of
Fsona controlled approximately 51% of Matrix's common stock immediately upon
conclusion of the transaction, representatives of Fsona are now Matrix's sole
directors and officers and the continuing business is that of Fsona. The share
exchange is deemed to be a reverse acquisition for accounting purposes. Fsona,
the acquired entity, is regarded as the predecessor entity as of February 9,
2007. Matrix was largely inactive prior to the transaction. The post-acquisition
entity is accounted for as a recapitalization of Fsona. The value assigned to
the common shares was valued based on the fair value of net liabilities of
Matrix at the recapitalization date which approximated carry over basis of
$52,800.

In accordance with provisions governing the accounting for
reverse acquisition, the figures presented as at December 31, 2006 and March 31,
2006 are those of Fsona Systems Corp.

At the time of the transaction, Fsona Systems Corp. (formerly
Matrix Ventures Inc.) had no assets and $52,800 of accounts payable and accrued
liabilities (included $28,300 owed to a shareholder of Matrix).

---

12

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

3.RECAPITALIZATION (contd)

Unaudited pro-forma revenue, net loss and loss per share
assuming the transaction had been completed on January 1, 2006 is as
follows:

|                                       |   | Unaudited proforma  |   |   | Unaudited proforma  |  
|-------------------------------------- | - | ------------------- | - | - | ------------------- | -
|                                       |   | for the three-month |   |   | for the three-month |  
|                                       |   | period ended        |   |   | period ended        |  
|                                       |   | March 31,           |   |   | March 31,           |  
|                                       |   | 2007                |   |   | 2006                |  
|Revenue                                | $ | 458,674             |   | $ | 288,287             |  
|Net loss for the period                | $ | (312,882            | ) | $ | (442,436            | )
|Basic and diluted loss per
      share | $ | (0.01               | ) | $ | (0.49               | )

4.INVENTORY

|                      |  | (Unaudited) |  |  |             |  |  |  | 
|--------------------- |  | ----------- |  |  | ----------- |  |  |  | 
|                      |  | March 31    |  |  | December 31 |  |  |  | 
|                      |  | 2007        |  |  | 2006        |  |  |  | 
|                      |  | $           |  |  | $           |  |  |  | 
|                      |  |             |  |  |             |  |  |  | 
|Raw materials         |  | 961,155     |  |  | 933,580     |  |  |  | 
|Work in progress      |  | 76,415      |  |  | 64,855      |  |  |  | 
|Finished goods        |  | 93,929      |  |  | 20,215      |  |  |  | 
|                      |  | 1,131,498   |  |  | 1,018,650   |  |  |  | 
|                      |  |             |  |  |             |  |  |  | 
|Less: current portion |  | 708,702     |  |  | 499,130     |  |  |  | 
|Long term portion     |  | 422,796     |  |  | 519,520     |  |  |  | 

Included in raw materials inventory are components that are not
expected to be consumed within the twelve-month period following the Balance
Sheet date, which are disclosed as long term inventory - $422,796 [December 31,
2006 - $519,520]

---

13

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

5.LOANS PAYABLE

The loans payable represent amounts outstanding as at:

|                                                                                                                                                                                                                                                             |  | (Unaudited) |  |  |             |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------- |  |  | ----------- |  |  |  | 
|                                                                                                                                                                                                                                                             |  | March 31    |  |  | December 31 |  |  |  | 
|                                                                                                                                                                                                                                                             |  | 2007        |  |  | 2006        |  |  |  | 
|                                                                                                                                                                                                                                                             |  | $           |  |  | $           |  |  |  | 
|                                                                                                                                                                                                                                                             |  |             |  |  |             |  |  |  | 
|Loan payable to Everona
      Limited (the Companys controlling stockholder) non-interest bearing,
      no terms of repayment and collateralized by a general security
      agreement covering all present and after acquired assets of the
      Company |  | 605,686     |  |  | 605,686     |  |  |  | 
|                                                                                                                                                                                                                                                             |  |             |  |  |             |  |  |  | 
|Amounts payable to Crown
      Capital Partners S.A. (Crown) (former controlling stockholder of the
      Company), non-interest bearing, unsecured and no terms of repayment
      [i]                                                                    |  | 515,566     |  |  | 436,275     |  |  |  | 
|                                                                                                                                                                                                                                                             |  |             |  |  |             |  |  |  | 
|Amounts payable to Crown by Everona upon change of control,
      non-interest bearing no terms of repayment [i]                                                                                                                                             |  | 3,312,001   |  |  | 3,312,001   |  |  |  | 
|                                                                                                                                                                                                                                                             |  | 4,433,253   |  |  | 4,353,962   |  |  |  | 
|                                                                                                                                                                                                                                                             |  |             |  |  |             |  |  |  | 
|Less: current portion                                                                                                                                                                                                                                        |  | 4,433,253   |  |  | 4,353,962   |  |  |  | 
|Long-term portion                                                                                                                                                                                                                                            |  | -           |  |  | -           |  |  |  | 

---

14

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

5.LOANS PAYABLE
(contd)

|[i]  | On March 28, 2006, Crown entered into an agreement with
      Everona Limited (Everona) to sell to Everona its 100% interest (1,860
      shares) in the Company and $3,312,001 of advances previously pended to the
      Company in exchange for an interest-bearing promissory note from Everona
      to Crown equal to $3,312,001. Following the acquisition, Everona entered
      into an agreement with the Company to convert the amounts owed to it by
      the Company in exchange for 18,552,518 shares of the Companys common
      stock. Management does not believe the transaction between stockholders
      principally involving amounts previously advanced by Crown has fully
      satisfied conditions for debt extinguishment. Accordingly, the amount
      owing from Everona to Crown continues to be carried on the Companys
      balance sheet as a liability until such time as Everona extinguishes its
      debt to Crown. At such time, the balance of the debt will be reclassified
      as equity of the Company.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[ii] | Subsequent to March 31, 2007 Crown advanced the Company
      an additional $250,000. The loan is non-interest bearing, unsecured, and
      bears no terms of repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

6.      CAPITAL STOCK

Authorized

On April 13, 2007 the Company effected an eight point
twenty-three (8.23) for one (1) forward stock split of the authorized, issued
and outstanding common stock. As a result, authorized capital has increased from
75,000,000 shares of common stock with a par value of $0.001 to 617,250,000
shares of common stock with a par value of $0.001.The effect of the
stock split has been applied on a retroactive basis to all related disclosure
and calculations in these consolidated financial statements.

7.      SEGMENTED INFORMATION

The Company operates in one primary operating segment, that
being the design, manufacture and sale of optical wireless equipment.

(Unaudited)
    
    
    (Unaudited)For the three
    
    
    For the threemonths ended
    
    
    months endedMarch 31,
    
    
    March 31,2007
    
    
    2006$
    
    
    $RevenuesCanada
    
    -
    
    
    7,580United States
    
    182,204
    
    
    141,969Asia-Pacific
    
    91,401
    
    
    -Central and Latin America
    
    103,705
    
    
    -Europe, Middle East and Africa
    
    81,364
    
    
    138,738458,674
    
    
    288,287


---

15

**Fsona Systems Corp.(formerly Matrix Ventures, Inc.)
NOTES TO** **CONSOLIDATED FINANCIAL STATEMENTS (Unaudited -
expressed in US dollars)**

**March 31, 2007 and December 31, 2006**

7.      SEGMENTED INFORMATION
(contd)

Three customers accounted for 16%, 13%, and 11% of revenue in
the three month period ended March 31, 2007 (four customers accounted for 26%,
16%, 14%, and 13% of revenue in the three month period ended March 31, 2006).
Substantially all of the Companys assets are located in Canada.

8.      COMMITMENTS AND
CONTINGENCIES

a]      TPC audit

In January 2004, Technologies Partnership Canada (TPC)
commissioned an audit of Fsonas predecessor company (fSONA Communications Ltd.)
prior claims for TPC funding. TPC indicated that the Fsona Communications Ltd.
had potentially overstated prior expenditures eligible for funding by
approximately $1,875,000 (CDN$2,180,625) which equates to a potential assessment
against the Company of $624,936 (CDN$726,801). The Company vigorously disagrees
with TPCs preliminary findings, with the exception of a possible $173,977
(CDN$202,335) overstatement. As the TPC audit is in process and a final
determination has not been made, the likelihood of repayment and the ultimate
amount, if any, are not determinable at this time. Accordingly, with the
exception of the possible $173,977 (CDN$202,335) overstatement which has been
accrued in accrued liabilities, no amount has been recorded in these financial
statements.

b]      Litigation

During the normal course of business activity, the Company was
involved in a litigation proceeding as at March 31, 2007. While the outcome of
these matters is subject to future resolution, management's evaluation and
analysis of such matters indicates that, individually and in the aggregate, the
probable ultimate resolution of such matters will not have a material adverse
effect on the Company's financial statements. The outcome of these matters is
presently indeterminable. Any settlement resulting from resolution of these
contingencies will be accounted for in the period of settlement.

---

16

Item 2. Management's Discussion and Analysis or Plan
of Operation.

FORWARD-LOOKING STATEMENTS

This
quarterly report contains forward-looking statements as that term is defined in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including the risks in the section entitled
"Risk Factors", 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 law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.

Our
interim financial statements are stated in United States dollars and are
prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
interim financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this quarterly report, particularly in the section entitled "Risk
Factors" of this quarterly report.

In
this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "CDN$" refer to Canadian
dollars and all references to "common shares" refer to the common shares in our
capital stock.

As
used in this quarterly report, the terms "we", "us", "our" and "fSONA" mean
fSONA Systems Corp. and our wholly owned subsidiary fSONA Systems (Operating)
Corp., unless otherwise indicated.

Corporate History

Our
company was incorporated in the State of Nevada on February 2, 2004. On April 5,
2007, we incorporated a wholly-owned Nevada subsidiary for the sole purpose of
effecting a name change through a merger with our subsidiary. On April 13, 2007,
we merged our subsidiary with and into our company, with our company continuing
on as the surviving corporation under the name fSONA Systems Corp. Our name
change was effected with NASDAQ on April 19, 2007 and our common shares became
quoted on the OTC Bulletin Board on April 19, 2007 under the new stock symbol of
"FSON". In addition, on April 13, 2007 we effected an eight point twenty-three
(8.23) for one (1) forward stock split of our authorized, issued and outstanding
common stock. As a result, our authorized capital increased from 75,000,000
shares of common stock to 617,250,000 shares of common stock.

On
February 8, 2007, we entered into a share exchange agreement with FSona Systems
Corp. (now known as fSONA Systems (Operating) Corp.) and the shareholders of
FSona Systems. The share exchange agreement contemplated our company acquiring
all of the issued and outstanding common shares of FSona Systems in exchange for
the issuance by our company of 2,439,348 common shares. The closing of the
transactions contemplated in the share exchange agreement and the acquisition of
all of the issued and outstanding shares of FSona Systems occurred on February
9, 2007. As of the closing date, the former shareholders of FSona Systems held
approximately 51.4% of the issued and outstanding common shares of our company.
The acquisition of FSona Systems is deemed to be a reverse acquisition for
accounting purposes. FSona Systems, the acquired entity, is regarded as the
predecessor entity as of February 9, 2007. Starting with the periodic report for
the quarter in which the acquisition was consummated, our company will file
annual and quarterly reports based on the December 31

---

17

fiscal year end of FSona Systems. Such financial statements
will depict the operating results of FSona Systems, including the acquisition of
our company, from February 9, 2007.

Following
incorporation, we commenced the business as a company engaged in the acquisition
and disposition of mineral properties. On April 21, 2004, we obtained an
exclusive option to acquire a 100% interest in a mineral claim known as the
Wanapitei River Property pursuant to the terms of an agreement with Terry Loney.
We were not successful in implementing our business plan as a company engaged in
the acquisition and disposition of mineral properties. As management of our
company investigated opportunities and challenges in the business of being a
mineral based company, management realized that the business did not present the
best opportunity for our company to realize value for our shareholders.
Accordingly, we abandoned our mineral business and elected not to exercise the
option to acquire the interest in the Wanapitei River Property. We have
identified the business previously operated by FSona Systems as a private entity
and entered into the share exchange agreement as a means to change our business.

Current Business

As
of the closing date of the share exchange agreement on February 9, 2007, our
company commenced the business of providing point-to-point broadband wireless
connectivity solutions. Specifically, we manufacture and sell wireless
transceivers that transfer data between two points using infrared laser beams,
such as voice, data, video, internet messages and large computer files. Our
products offer a point-to-point, line of sight, wireless high-speed
communications link established between two transceiver units, which are
"linked" wirelessly through the alignment of our SONAbeam products which
transmit data via a laser beam. Our transceiver units are designed to provide
wireless link transmission of data at speeds of up to 2.5 gigabits per second,
with transmission similar to those obtained with fiber, and to transmit that
data at distances of up to 7 km in clear weather conditions. In addition, our
SONAbeam products can be rapidly installed and redeployed. Our business
strategy is to generate revenues through the commercialization of our
technologies. Our target customers include the military, government, carriers,
service providers, private enterprise and other entities seeking wireless
communication solutions. Our products operate based on eye-safe 1550 nanometer
wavelength free space optics technology, and could potentially be similar in
data rates to fiber optic cable. Free space optics operates when a laser
transmitter generates focused light waves that carry data through the atmosphere
to an optical receiver that recognizes those light waves.

Managements Discussion and Analysis

You
should read the following discussion of our financial condition and results of
operations together with the unaudited financial statements and the notes to the
unaudited financial statements included in this quarterly report. This
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results may differ materially from those anticipated in
these forward-looking statements.

RESULTS OF OPERATIONS  THREE MONTHS ENDED MARCH 31, 2007
COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2006

Our
net loss for the three months ended March 31, 2007 was $312,882 as compared to a
net loss of $435,670 for the three months ended March 31, 2006.

Sales and Cost of Sales

Sales
for the three months ended March 31, 2007 were $458,674, which represents a
59.10% increase from sales of $288,287 for the three months ended March 31,
2006. The increase in sales revenue during this period was primarily
attributable to sales in the Asia-Pacific and the Central and Latin America
regions.

Cost
of sales for the three months ended March 31, 2007 was $356,111, an increase of
74.14% from cost of sales of $204,499 for the three months ended March 31, 2006.
Cost of sales for the three months ended March 31, 2007 was 77.64% of total
sales compared with 70.94% of total sales for the three months ended March 31,
2006. Direct labor costs and overhead expenses related to our manufacturing are
not expected to increase materially as we believe our current facility has the
capacity to meet forecasted demand.

---

18

Operating Expenses

Total
operating expenses for the three months ended March 31, 2007 were $461,487,
which represents an 11.08% decrease in total operating expenses of $518,997 for
the three months ended March 31, 2006. Sales and marketing expenses, research
and development expenses as well as general and administrative expenses
constitute the major components of our total operating expenses.

Sales
  and marketing expenses for the three months ended March 31, 2007 were $168,429,
  which represents an 27.17% decrease in sales and marketing expenses of $231,251
  for the three months ended March 31, 2006. Management anticipates that sales
  and marketing expenses will increase as we market our products, hire new sales
  personnel, and support and expand our partner programs.

General
and administrative expenses for the three months ended March 31, 2007 were
$152,628, which represents an 11.42% increase in general and administrative
expenses of $136,982 for the three months ended March 31, 2006. Management
believes that these costs are projected to rise to $771,000 and $826,000 in our
fiscal years ended 2007 and 2008, respectively, as we build our operations in
both our Richmond and Virginia offices.

Research
and development expenses for the three months ended March 31, 2007 were
$138,786, which represents a 7.64% decrease in research and development expenses
of $150,263 for the three months ended March 31, 2006. Management anticipates
that these costs will increase in our 2007 fiscal year. We intend to increase
research and development expenses to $627,000 and $840,000 for our 2007 and 2008
fiscal years, respectively. Our research and development efforts will be focused
on the completion of our 1250 E product, active tracking on our SONAbeam E
product line and the development of higher bandwidth products in addition to
other product and software upgrades.

Other Income and Expenses

During
the three months ended March 31, 2007, we recognized a foreign exchange rate
gain of $39,854, as compared to a foreign exchange loss of $9,458 during the
three months ended March 31, 2006. Such gains are principally the result of the
strengthening Canadian dollar on our net liability position.

LIQUIDITY AND CAPITAL RESOURCES

Our
  company's principal cash requirements are for operating expenses, including
  inventory purchases, which we anticipate will rise as a result of the increase
  in our sales backlog. We anticipate that compensation expense will require a
  greater percentage of our cash requirements in the future due to our anticipated
  increase in our sales and marketing efforts.

Capital Resources

As
of March 31, 2007, we had cash of $57,030. As of March 31, 2007, we had a
working capital deficiency of $4,850,879 (including $3,312,001 being the amount
assumed by our current controlling stockholder due to our former controlling
stockholder which has not yet met the criteria for extinguishment from our
financial statements) compared with a working capital deficiency of $4,542,158
as of December 31, 2006, which represents an increase in working capital
deficiency of $308,721.

We
have suffered recurring losses. The ability of our company to meet our financial
liabilities and commitments is primarily dependent upon the continued extension
of credit by our creditors, the continued financial support of our directors and
shareholders, the continued issuance of equity to new shareholders, and our
ability to achieve and maintain profitable operations.

Management
believes that our company's cash and cash equivalents and cash provided by
operating activities will not be sufficient to meet our working capital
requirements for the next twelve month period. We estimate that we will require
an additional $1,002,000 over the next twelve month period ending March 31, 2008
to fund our operating cash shortfall. Our company plans to raise the capital
required to satisfy our immediate short-

---

19

term needs and additional capital required to meet our
estimated funding requirements for the next twelve months primarily through the
private placement of our equity securities. There is no assurance that our
company will be able to obtain further funds required for our continued working
capital requirements.

There
is substantial doubt about our ability to continue as a going concern as the
continuation of our business is dependent upon obtaining further long-term
financing, successful and sufficient market acceptance of our current product
offerings and any new product offerings that we may introduce, the continuing
successful development of our product offerings and related technologies, and,
finally, achieving a profitable level of operations. The issuance of additional
equity securities by us could result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.

Due
to the uncertainty of our ability to meet our current operating and capital
expenses, in their report on our audited financial statements for the year ended
December 31, 2006, our independent auditors included an explanatory paragraph
regarding substantial doubt about our ability to continue as a going concern.
Our financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent auditors.

Cash Flow Used in Operating Activities

Operating
activities used cash of $189,475 for the three months ended March 31, 2007 as
compared to $490,533 for the three months ended March 31, 2006. The cash used in
operating activities for the three month period ended March 31, 2007, was
primarily attributable to our net loss for the period.

We
  anticipate that operating expenses will increase in our 2007 fiscal year. We
  intend to incur higher operating costs to fund increased sales and marketing
  activities over the next two years.

Cash Flow Used in Investing Activities

Investing
activities used cash of $nil for the three months ended March 31, 2007 as
compared to $10,672 for the three months ended March 31, 2006. The decrease in
cash used in investing activities during the period was due to a lack of
investing activities during the period.

Cash Flow Provided by Financing Activities

Financing
activities provided cash of $79,212 for the three months ended March 31, 2007 as
compared to $265,308 for the three months ended March 31, 2006. The cash
received during the respective periods were proceeds from certain loans payable.

On
March 28, 2006, FSona Systems underwent a change in control as a result of the
sale of all of Fsona Systems' common shares and a transfer of debt owing by
Fsona Systems in the aggregate amount of $3,312,001 between two shareholders.
The intercompany debt of $3,312,001was subsequently converted into 18,552,518
shares of Fsona Systems following the transfer. For financial statement
purposes, the debt assumed by our current controlling shareholder remains on the
balance sheet of Fsona Systems as the assignment did not fully satisfy all the
tests for extinguishment. Such amounts will be reclassified to equity for
financial statement purposes at such time as the current shareholder
extinguishes the debt to the former controlling shareholder.

Capital Expenditures

We
do not have any material commitments for capital expenditures and management
does not anticipate that our company will spend additional material amounts on
capital expenditures in the near future.

---

20

Off-Balance Sheet Arrangements

Our
company has no outstanding derivative financial instruments, off-balance sheet
guarantees, interest rate swap transactions or foreign currency contracts. Our
company does not engage in trading activities involving non-exchange traded
contracts.

SIGNIFICANT ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities.

We believe that the estimates, assumptions and judgments
involved in the accounting policies described below have the greatest potential
impact on our financial statements, so we consider these to be our critical
accounting policies. Because of the uncertainty inherent in these matters,
actual results could differ from the estimates we use in applying the critical
accounting policies. Certain of these critical accounting policies affect
working capital account balances, including the policies for revenue
recognition, allowance for doubtful accounts, inventory reserves and income
taxes. These policies require that we make estimates in the preparation of our
financial statements as of a given date.

Within the context of these critical accounting policies, we
are not currently aware of any reasonably likely events or circumstances that
would result in materially different amounts being reported.

Revenue Recognition

Revenue from the sales of these wireless products, which
include hardware and software, is recognized when the complete system including
the software is delivered, the fees are fixed and determinable, the resulting
receivable is deemed collectible by management and any uncertainties with regard
to customer acceptance are insignificant. Products are generally shipped "FOB
shipping point." Revenues from installation, training and post-contract customer
support are insignificant. We generally warrant our products against defects in
materials and workmanship. The estimated costs of warranty obligations are
recognized at the time of revenue recognition based on contract terms and prior
claims experience. Revenue related to extended warranty and product maintenance
contracts is deferred and recognized on a straight-line basis over the extended
warranty period.

Allowance for Doubtful Accounts

We make ongoing estimates relating to the collectability of our
accounts receivable and maintain a reserve for estimated losses resulting from
the inability of specific customers to meet their financial obligations to us.
In determining the amount of the reserve, we consider our historical level of
credit losses and make judgments about the creditworthiness of significant
customers based on ongoing credit evaluations. Since we cannot predict future
changes in the financial stability of our customers, actual future losses from
uncollectible accounts may differ from our estimates. If the financial condition
of our customers were to deteriorate, resulting in their inability to make
payments, a larger reserve may be required. In the event we determined that a
smaller or larger reserve was appropriate, we would record a credit or a charge
to selling and administrative expense in the period in which we made such a
determination.

Inventory Reserves

We also make ongoing estimates relating to the market value of
inventories, based upon our assumptions about future demand and market
conditions. If we estimate that the net realizable value of our inventory is
less than the cost of the inventory recorded on our books, we record a reserve
equal to the difference between the cost of the inventory and the estimated net
realizable market value. This reserve is recorded as a charge to cost of goods
sold. If changes in market conditions result in reductions in the estimated
market value of our inventory below our

---

21

previous estimate, we would increase our reserve in the period
in which we made such a determination and record a charge to cost of goods
sold.

Income Taxes

As part of the process of preparing our financial statements,
we are required to estimate our income taxes in each of the jurisdictions in
which we operate. This process involves us estimating our actual current tax
exposure together with assessing temporary differences resulting from differing
treatment of items, such as deferred revenue, for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are
included in our balance sheets. We must then assess the likelihood that our
deferred tax assets will be recovered from future taxable income and, to the
extent we believe that recovery is not likely, we must establish a valuation
allowance. To the extent we establish a valuation allowance or increase this
allowance in a period, we must include an expense within the tax provision in
the Statement of Operations.

Significant management judgment is required in determining our
provision for income taxes, deferred tax assets and liabilities and any
valuation allowance recorded against our net deferred tax assets. Management
continually evaluates our deferred tax asset as to whether it is likely that the
deferred tax assets will be realized. If management ever determined that our
deferred tax asset was not likely to be realized, a write-down of that asset
would be required and would be reflected in the provision for taxes in the
accompanying period.

Debt Extinguishment

On March 28, 2006, Crown Capital (our companys former 100%
stockholder) entered into an agreement with Everona Limited to sell to Everona
its 100% interest in our company and $3,312,001 of the loan in exchange for an
interest-bearing promissory note from Everona to Crown Capital equal to
$3,312,001. Following the acquisition, Everona entered into an agreement with
our company to convert the amounts owed to it by our company in exchange for
18,552,518 shares of our company's common stock. Management does not believe the
transaction between stockholders principally involving amounts previously
advanced by Crown Capital has fully satisfied conditions for debt
extinguishment. Accordingly, the amount owing from Everona to Crown Capital
continues to be carried on our company's balance sheet as a liability until such
time as Everona extinguishes its debt to Crown Capital. At such time, the
balance of the debt will be reclassified as equity of our company.

Recently Issued Accounting Standards

For a discussion of recently issued accounting standards
relevant to our financial performance, see Note 2 of Notes to our March 31, 2007
un-audited financial statements included elsewhere in this current report.

RISK FACTORS

Much
of the information included in this quarterly report includes or is based upon
estimates, projections or other "forward looking statements". Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. 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 herein.

Such
estimates, projections or other "forward looking statements" involve various
risks and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other "forward looking
statements". Prospective investors should consider carefully the risk factors
set out below.

---

22

RISKS RELATED TO OUR BUSINESS

We have had negative cash flows from operations since
inception. We will require significant additional financing, the availability of
which cannot be assured, and if our company is unable to obtain such financing,
our business may fail.

To
date, we have had negative cash flows from operations and have depended on sales
of our equity securities and debt financing to meet our cash requirements. Our
ability to develop and commercialize our technologies will be dependent upon our
ability to raise significant additional financing. If we are unable to obtain
such financing, we will not be able to fully develop our business. Specifically,
we will need to raise additional funds to:

| | - | support our planned growth and
      carry out our business plan;
| | - | -----------------------------------------------------------------
| |   |                                                                  
| | - | continue progress in our research
      and development programs;
| |   |                                                                  
| | - | protect our intellectual
      property;                         
| |   |                                                                  
| | - | hire top quality personnel for
      all areas of our business;  
| |   |                                                                  
| | - | address competing technological
      and market developments;   
| |   |                                                                  
| | - | establish additional
      collaborative relationships; and      
| |   |                                                                  
| | - | market and develop our
      technologies.                       

We
may not be able to obtain additional equity or debt financing on acceptable
terms as required. Even if financing is available, it may not be available on
terms that are favorable to us or in sufficient amounts to satisfy our
requirements. If we require but are unable to obtain additional financing in the
future, we may be unable to implement our business plan and our growth
strategies, respond to changing business or economic conditions, withstand
adverse operating results and compete effectively. More importantly, if we are
unable to raise further financing when required, we may be forced to scale down
our operations and our ability to generate revenues may be negatively affected.

We have a history of losses which raise substantial doubt
about our ability to continue as a going concern.

We
incurred net losses of $312,882 for the three months ended March 31, 2007. At
March 31, 2007, the accumulated deficit was $4,522,268. We can offer no
assurance that we will operate profitably or that we will generate positive cash
flow in the future. In addition, our operating results in the future may be
subject to significant fluctuations due to many factors not within our control,
such as the level of competition and general economic conditions.

Due
to the nature of our business and the early stage of our development, our
securities must be considered highly speculative. We are engaged in the business
of manufacturing and selling SONAbeam systems, or wireless transceivers that
transfer data, voice and video between two points using infrared laser beams.
The technology is referred to as free space optics or optical wireless. We have
not realized a profit from our operations to date and there is little likelihood
that we will realize any profits in the near future. Any profitability in the
future from our business will be dependent upon the successful commercialization
of our core technology, which itself is subject to numerous risk factors as set
forth herein.

We
expect to continue to incur development costs and operating costs. Consequently,
we expect to incur operating losses and negative cash flows until our technology
gains market acceptance sufficient to generate a sustainable level of income
from the commercialization of our technology. Our history of losses raise
substantial doubt about our ability to continue as a going concern, as described
in the explanatory paragraph in the independent registered public accounting
firm's report on the financial statements of our company for the year ended
December

---

23

31, 2006. If the going concern assumption was not appropriate
for these financial statements, then adjustments would be necessary to the
carrying value of assets and liabilities, the reported loss and the balance
sheet classification used.

Technological changes in the broadband wireless industry
could render our optical wireless products uncompetitive or obsolete, which
could prevent us from achieving market share and sales.

Failure
to refine our technology and to develop and introduce new products could cause
our products to become uncompetitive or obsolete, which could prevent us from
achieving market share and sales. The broadband and optical wireless industry is
rapidly evolving and highly competitive. We will need to invest significant
financial resources in research and development to keep pace with technological
advances in the industry and to compete in the future and we may be unable to
secure such financing. We believe that a variety of competing broadband and
optical wireless technologies may be under development by other companies that
could result in lower manufacturing costs or higher product performance than
those expected for our products. Our development efforts may be rendered
obsolete by the technological advances of others, and other technologies may
prove more advantageous for the commercialization of such products.

Our company relies upon the successful research and
development of new products and technologies but we can offer no assurance that
our research and development efforts will produce positive results or keep pace
with our competitors.

Research
and development activities are inherently uncertain, and we could encounter
practical difficulties in commercializing our research and development results.
Our expenditures on research and development may not produce corresponding
benefits. Other companies are developing a variety of competingtechnologies that could produce products that prove more cost-effective or
have better performance than our current or future SONAbeam products. As a
result, our technology may be rendered obsolete by the technological advances of
others, which could reduce our net sales and market share.

The rate at which potential customers are willing to
purchase our products could be slowed by negative prior experiences they may
have had with previously existing point-to-point wireless technologies.

Potential
customers within our target market may have had negative prior experiences with
previously existing wireless point-to-point technologies, such as inadequate
transmission capacity or service outages due to weather conditions. Accordingly,
it could take significant time to educate the market as to the unique attributes
of our products that enable our products to overcome the types of problems that
prevented prior wireless technologies from serving as viable alternatives to
traditional communication methods.

Our customers' failure to obtain the access rights necessary
to install our equipment could adversely affect our ability to expand our
business.

Our
customers may not be able to obtain, from building owners or managers, access
rights to buildings, rooftops or towers to successfully install and service our
equipment as planned. If our customers do not have access to a window from which
to transmit, our customers will require access rights to the building and
rooftop where our products will be placed in order to install our equipment. Our
customers' failure to obtain access rights at the pace and locations necessary
could have an adverse affect on our business and financial condition. In
addition, customers may need to obtain zoning or other governmental approvals in
order to place our products on a particular building or in a particular area.
They may not be able to obtain these approvals in a timely manner, or at all.

It could prove costly for us to effectively compete in the
  intensely competitive telecommunications equipment industry, which failure could
  negatively impact our financial results.

Both
the telecommunications equipment industry in general and the wireless
communications equipment industry in particular are intensely competitive.
Companies operating in the telecommunications equipment industry are always
seeking to develop viable wireline and wireless high-speed communications
products and services, whether it is by:

---

24

| | - | developing technologies that improve the performance of existing
      copper alternatives;
| | - | -------------------------------------------------------------------------------------------
| |   |                                                                                            
| | - | developing methods for lowering the cost of fiber optic cable;
      or                    
| |   |                                                                                            
| | - | developing new and improved point-to-point and wide area wireless
      solutions.         

The
wireless communications industry in which we principally compete has attracted
substantial media and other attention in recent years in part due to the ability
of newly developed equipment to provide wireless connectivity simply, quickly,
and efficiently. These factors have led numerous companies to develop or
commence developing products that compete or could compete with ours. The large
number of companies offering products that may be perceived to be similar or
even interchangeable with our products could have the effect of reducing the
prices at which we are able to sell our products. In turn, this could reduce our
gross margins and negatively impact our general financial results.

Exchange rate risk may negatively affect our cost of sales
and gross margins, and could result in exchange losses.

Although
our reporting currency is the United States dollar, we manufacture and incur
costs in the currency of the Canadian dollar. As a result, we are subject to
exchange rate risk. Changes in exchange rates between the United States dollar
and the Canadian dollar could affect our cost of sales and gross margins, and
could result in exchange losses. We cannot accurately predict the impact of
future exchange rate fluctuations on our results of operations. Currently, we do
not engage in any exchange rate hedging activities and, as a result, any
volatility in currency exchange rates may have an immediate adverse effect on
our financial condition and results of operations.

Our international operations subject us to a number of
risks, including unfavorable political, regulatory, labor and tax conditions in
foreign countries.

Our
international operations subject us to the legal, political, social and
regulatory requirements and economic conditions of many jurisdictions. Risks
inherent to international operations, include the following:

| | - | difficulty in enforcing agreements in foreign legal
      systems;                                                                                                                                                                                    
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                       
| | - | foreign countries may impose additional withholding taxes
      or otherwise tax our foreign income, impose tariffs or adopt other
      restrictions on foreign trade and investment, including currency exchange
      controls;                    
| |   |                                                                                                                                                                                                                                                       
| | - | fluctuations in exchange rates may affect product demand
      and may adversely affect our profitability in United States dollars to the
      extent the price of our products and cost of raw materials is denominated
      in a foreign currency;
| |   |                                                                                                                                                                                                                                                       
| | - | inability to obtain, maintain or enforce intellectual
      property rights;                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                       
| | - | changes in general economic and political conditions in
      the countries in which we operate;                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                       
| | - | unexpected adverse changes in foreign laws or regulatory
      requirements, including those with respect to export duties and quotas;                                                                                                                
| |   |                                                                                                                                                                                                                                                       
| | - | difficulty with staffing and managing widespread
      operations;                                                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                       
| | - | trade barriers such as export requirements, tariffs,
      taxes and other restrictions and expenses, which could increase the prices
      of our products and make us less competitive in some countries; and                                       
| |   |                                                                                                                                                                                                                                                       
| | - | difficulty of and costs relating to compliance with the
      different commercial and legal requirements of the overseas markets in
      which we offer and sell our products.                                                                      

---

25

Our
international operations require us to respond to rapid changes in market
conditions in these countries. The success of our international operations
depends, in part, on our ability to succeed in differing legal, regulatory,
economic, social and political conditions. We may not be able to develop and
implement policies and strategies that will be effective in each location where
we do business.

We may lose our competitiveness if we are not able to
protect our proprietary technology and intellectual property rights against
infringement, and any related litigation may be time-consuming and costly.

Our
success and ability to compete depends to a significant degree on our
proprietary technology. If any of our competitors copy or otherwise gain access
to our proprietary technology or develop similar technologies independently, we
may not be able to compete as effectively. The measures we have implemented to
protect our proprietary technology and other intellectual property rights are
currently based upon a combination of provisional patent applications, patents,
trademarks and trade secrets. These measures, however, may not be adequate to
prevent the unauthorized use of our proprietary technology and our other
intellectual property rights. Further, the laws of foreign countries may provide
inadequate protection of such intellectual property rights. We may need to bring
legal claims to enforce or protect such intellectual property rights. Any
litigation, whether successful or unsuccessful, may result in substantial costs
and a diversion of our company's resources. In addition, notwithstanding our
rights to our intellectual property, other persons may bring claims against us
alleging that we have infringed on their intellectual property rights or claims
that our intellectual property rights are not valid. Any claims against us, with
or without merit, could be time consuming and costly to defend or litigate,
divert our attention and resources, result in the loss of goodwill associated
with our business or require us to make changes to our technology.

Our products may subject us to product liability exposure
  and our product liability insurance may not be sufficient to cover these claims.

Use of
our products may expose us to product liability claims in the event they cause
injury or harm our customers or third parties' businesses. Although we have
product liability insurance, it is possible that our insurance coverage could be
insufficient to fully cover potential claims. Due to our limited financial
resources, we may not be able to satisfy any liability resulting from these
claims, which would negatively affect our financial condition.

If we fail to effectively manage the growth of our company
and the commercialization of our technology, our future business results could
be harmed and our managerial and operational resources may be strained.

As we
proceed with the development of our technology and the expansion of our
marketing and commercialization efforts, we expect to experience significant
growth in the scope and complexity of our business. We will need to add staff to
market our services, manage operations, handle sales and marketing efforts and
perform finance and accounting functions. We anticipate that we will be required
to hire additional personnel in order to successfully advance our operations.
This growth is likely to place a strain on our management and operational
resources. The failure to develop and implement effective systems, or to hire
and retain sufficient personnel for the performance of all of the functions
necessary to effectively service and manage our potential business, or the
failure to manage growth effectively, could have a material adverse effect on
our business and financial condition.

RISKS RELATED TO OUR COMMON STOCK

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A
prolonged decline in the price of our common stock could result in a reduction
in the liquidity of our common stock and a reduction in our ability to raise
capital. Because a significant portion of our operations have been and will be
financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our
operations. Such reductions may force us to reallocate funds from other planned
uses and may have a significant negative effect on our business plan and
operations, including our ability to develop new products and continue our
current operations. If our stock price declines, we can offer no assurance that
we will be able to raise additional capital or generate funds from operations
sufficient to meet our

---

26

obligations. If we are unable to raise sufficient capital in
the future, we may not be able to have the resources to continue our normal
operations.

The
market price for our common stock may also be affected by our ability to meet or
exceed expectations of analysts or investors. Any failure to meet these
expectations, even if minor, may have a material adverse effect on the market
price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our
certificate of incorporation, as amended, authorizes the issuance of up to
617,250,000 shares of common stock with a par value of $0.001. Our board of
directors may choose to issue some or all of such shares to acquire one or more
businesses or to provide additional financing in the future. The issuance of any
such shares will result in a reduction of the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will cause a reduction in the proportionate ownership and voting
power of all current shareholders. Further, such issuance may result in a change
of control of our corporation.

Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.

The
Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

NASD sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.

In
addition to the "penny stock" rules described above, the National Association of
Securities Dealers (NASD) has adopted rules that require that in recommending an
investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, the NASD believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. The NASD requirements make it more
difficult for broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

---

27

Our
common stock currently trades on a limited basis on the OTC Bulletin Board.
Trading of our stock through the OTC Bulletin Board is frequently thin and
highly volatile. There is no assurance that a sufficient market will develop in
our stock, in which case it could be difficult for shareholders to sell their
stock. The market price of our common stock could fluctuate substantially due to
a variety of factors, including market perception of our ability to achieve our
planned growth, quarterly operating results of our competitors, trading volume
in our common stock, changes in general conditions in the economy and the
financial markets or other developments affecting our competitors or us. In
addition, the stock market is subject to extreme price and volume fluctuations.
This volatility has had a significant effect on the market price of securities
issued by many companies for reasons unrelated to their operating performance
and could have the same effect on our common stock.

Item 3. Controls and Procedures.

As of
March 31, 2007, our company carried out an evaluation, under the supervision and
with the participation of our company's management, including our company's
principal executive and financial officer, of the effectiveness of the design
and operation of our company's disclosure controls and procedures pursuant to
Rule 13a-14 of the Securities and Exchange Act of 1934 (the Exchange Act).
Based upon that evaluation, our company's principal executive and financial
officer concluded that as of March 31, 2007, our company's disclosure controls
and procedures were not effective.

Our
company does not have an adequate number of independent board members nor an
independent audit committee. In addition, the lack of employees results in our
company's inability to have a sufficient segregation of duties within its
accounting and financial activities. These absences constitute material
weaknesses in our company's corporate governance structure and internal
controls.

Our
company is currently addressing our board member composition, and hopes to
remedy the situation in the coming quarter ended June 30, 2007.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

During
  the normal course of business activity, our company is involved in a litigation
  proceeding as at March 31, 2007. While the outcome of these matters is subject
  to future resolution, management's evaluation and analysis of such matters indicates
  that, individually and in the aggregate, the probable ultimate resolution of
  such matters will not have a material adverse effect on our financial statements.
  The outcome of these matters is presently indeterminable. Any settlement resulting
  from resolution of these contingencies will be accounted for in the period of
  settlement.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information

None.

---

28

Item 6. Exhibits.

|Exhibit |                                                                                                                                                                                                                                                  
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                  
|(2)     | Plan of Purchase,
        Sale, Reorganization, Arrangement, Liquidation or Succession                                                                                                                                                           
|        |                                                                                                                                                                                                                                                  
|2.1     | Share Exchange
        Agreement dated February 8, 2007, among our company, FSona Systems and
        the former shareholders of FSona Systems (incorporated by reference from
        our Current Report on Form 8- K filed on February 1, 2007)
|        |                                                                                                                                                                                                                                                  
|(3)     | Articles
        of Incorporation and Bylaws                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                  
|3.1     | Articles of
        Incorporation (incorporated by reference from our Registration Statement
        on Form SB-2 filed on November 12, 2004)                                                                                                    
|        |                                                                                                                                                                                                                                                  
|3.2     | Bylaws (incorporated
        by reference from our Registration Statement on Form SB-2 filed on November
        12, 2004)                                                                                                                       
|        |                                                                                                                                                                                                                                                  
|        | Articles of
        Merger filed with the Secretary of State of Nevada on April 10, 2007 and
        which is effective April 13, 2007 (incorporated by reference from our
        Current Report on Form 8-K filed on May 11, 2007)             
|        |                                                                                                                                                                                                                                                  
|        | Certificate
        of Change filed with the Secretary of State of Nevada on April 10, 2007
        and which is effective April 13, 2007 (incorporated by reference from
        our Current Report on Form 8-K filed on May 11, 2007)          
|        |                                                                                                                                                                                                                                                  
|(10)    | Material
        Contracts                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                  
|10.1    | Property Option
        Agreement dated April 21, 2004 (incorporated by reference from our Registration
        Statement on Form SB-2/A filed on January 10, 2005)                                                                              
|        |                                                                                                                                                                                                                                                  
|10.2    | Property Option
        Amending Agreement dated December 31, 2005 (incorporated by reference
        from our Registration Statement on Form SB-2/A filed on January 20, 2005)                                                                  
|        |                                                                                                                                                                                                                                                  
|10.3    | Loan Agreement
        (incorporated by reference from our Registration Statement on Form SB-2/A
        filed on January 20, 2005)                                                                                                              
|        |                                                                                                                                                                                                                                                  
|10.4    | Employment Agreement
        dated March 22, 2005 between FSona Systems and Sunny Taylor (incorporated
        by reference from our Current Report on Form 8-K filed on February 1,
        2007)                                               
|        |                                                                                                                                                                                                                                                  
|(14)    | Code of Ethics                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                  
|14.1    | Code of Ethics
        (incorporated by reference from our Current Report on Form 8-K filed on
        February 1, 2007)                                                                                                                         
|        |                                                                                                                                                                                                                                                  
|(21)    | Subsidiaries
        of the Small Business Issuer                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                  
|        | FSona Systems
        (Operating) Corp., a private Nevada corporation (incorporated by reference
        from our Current Report on Form 8-K filed on February 1, 2007)                                                                          
|        |                                                                                                                                                                                                                                                  
|(31)    | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                  
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Andrew Grieve                                                                                                                                                              
|        |                                                                                                                                                                                                                                                  
|(32)    | Section 1350
        Certifications                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                  
|32.1*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002                                                                                                                                                                               

* Filed herewith

---

29

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

FSONA SYSTEMS CORP.

By: /s/ Andrew Grieve Andrew Grieve, President, Secretary
and Treasurer (Principal Executive Officer and Principal Financial Officer
and Principal Accounting Officer) May 21, 2007

---