**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB** ****





Mark
      One:





x
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
                2007**





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








**Commission
      file number 0-31176**





**SHELRON
      GROUP INC.**


**Delaware**
              **04-2968425**(State
                  or Other Jurisdiction of
              (I.R.S.
                  EmployerIncorporation
                  or Organization)
              Identification
                  No.)29
                  Broadway, New York, New York
              **10006**(Address
                  of principal executive offices)
              (Zip
                  Code)




**212-836-4041**


(Issuer's
      Telephone Number, Including Area Code)





**29
      Broadway, New York, New York 10006**


(Former
      address of principal executive offices)




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





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


**Common
      Stock**  **$.001
      par value**





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the exchange Act. o





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 o





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





Indicate
      by check mark whether the registrant is a shell company (as define in Rule
      12b-2
      of the Exchange Act Yes o No x





Issuer's
      revenues for the year ended December 31, 2007: $329,244





The
      aggregate market value as at March 24, 2008 of the Common Stock of the issuer
      held by non-affiliates was $575,283, (based on the last reported closing price
      of $0.0020 per share on March 24, 2008).





The
      number of shares outstanding of the issuer's Common Stock as of March 27, 2008
      was 410,840,344.





Transitional
      Small Business Disclosure Format:   Yes
o
      No x








**SHELRON
      GROUP INC.**


**2007
      FORM 10-KSB ANNUAL REPORT**





**TABLE
      OF CONTENTS**


**PART
                  I**Item
                  1.
              
              Description
                  of Business
              
              3Item
                  2.
              
              Description
                  of Properties
              
              8Item
                  3.
              
              Legal
                  Proceedings
              
              8Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              8**PART
                  II**Item
                  5.
              
              Market
                  for Common Equity and Related Stockholder Matters
              
              9Item
                  6.
              
              Management's
                  Discussion and Analysis
              
              10Item
                  7.
              
              Financial
                  Statements
              
              17Item
                  8.
              
              Changes
                  In and Disagreements With Accountants onAccounting
                  and Financial Disclosure
              
              18Item
                  8A.
              
              Controls
                  and Procedures
              
              18Item
                  8B.
              
              Other
                  Information
              
              18**PART
                  III**Item
                  9.
              
              Directors,
                  Executive Officers, Promoters and Control Persons and Corporate
                  Governance, Compliance with Section 16(a) of
                  the Exchange Act
              
              19Item
                  10.
              
              Executive
                  Compensation
              
              20Item
                  11.
              
              Security
                  Ownership of Certain Beneficial Owners and Management and
                  Related Stockholder Matters
              
              21Item
                  12.
              
              Certain
                  Relationships and Related Transactions
              
              22Item
                  13.
              
              Exhibits,
              
              23Item
                  14.
              
              Principal
                  Accountant Fees and Director Independence
              
              24


**FORWARD
      LOOKING STATEMENTS**





CERTAIN
      STATEMENTS MADE IN THIS ANNUAL REPORT ON FORM 10-KSB ARE "FORWARD-LOOKING
      STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM
      ACT
      OF 1995. FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY TERMINOLOGY SUCH AS
      "MAY", "WILL", "SHOULD", "EXPECTS", "INTENDS", "ANTICIPATES", "BELIEVES",
      "ESTIMATES", "PREDICTS", OR "CONTINUE" OR THE NEGATIVE OF THESE TERMS OR OTHER
      COMPARABLE TERMINOLOGY. BECAUSE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND
      UNCERTAINTIES, THERE ARE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS
      TO
      DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING
      STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT EXPECTATIONS REFLECTED IN THE
      FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CANNOT GUARANTEE FUTURE RESULTS,
      PERFORMANCE OR ACHIEVEMENTS. MOREOVER, NEITHER THE COMPANY NOR ANY OTHER PERSON
      ASSUMES RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THESE
      FORWARD-LOOKING STATEMENTS. THE COMPANY IS UNDER NO DUTY TO UPDATE ANY
      FORWARD-LOOKING STATEMENTS AFTER THE DATE OF THIS REPORT TO CONFORM SUCH
      STATEMENTS TO ACTUAL RESULTS.





**PART
      1**





**ITEM
      1. DESCRIPTION OF BUSINESS**





**COMPANY
      OVERVIEW**





Shelron
      Group, Inc. is a company that develops and markets e-commerce advertising and
      comparative shopping software products and services. We released our initial
      product, ActiveShopper, in August 2004. ActiveShopper is a free software
      download that automatically scans, locates and compares prices for an item
      that
      a consumer selects at an e-commerce site and is designed to assist consumers
      to
      make informed purchase decisions by enabling them to find the items they are
      looking for, compare products, prices and stores, and buy from among thousands
      of online merchants. We also maintain a comparison shopping Web site located
      at: www.activeshopper.com .
      We are
      also considering strategic acquisitions of synergistic technologies that
      management believes will enhance our market positioning.





We
      have
      been engaged in the on-line shopping business since March 2004. Prior to that
      time, we were engaged in the field of designing and developing business
      applications software. We generate revenues primarily in the form of payments
      from online merchants for directing traffic to their websites and managing
      merchants advertising campaigns through ActiveShopper.





We
      were
      originally incorporated in the State of Massachusetts in June 1987, under the
      name "Professional Brushes, Inc." In April 1999, we changed our state of
      incorporation to Delaware by means of a merger with and into a Delaware company
      and, in connection therewith, changed our name to "PB Acquisition Corp." In
      May
      2000, we entered into a share exchange agreement with TTTTickets.com, Inc.,
      a
      Delaware corporation ("Tickets") incorporated in April 2000 for the purposes
      of
      developing and maintaining an internet website for the sale and purchase of
      event tickets, pursuant to which Tickets became a wholly owned subsidiary of
      our
      company. We also changed our name to "TTTTickets Holding Corp." Thereafter,
      in
      November 2001, we entered into a stock purchase and merger agreement with B-Park
      Communications, Inc., ("B-Park") a Delaware corporation formed in August 2001
      for the sole purpose of entering into such agreement. In September 2002, we
      changed our name to "Shelron Group, Inc.".





In
      this
      report, the terms "we," "us" and the "Company" refer to Shelron Group, Inc.,
      its' predecessors, and subsidiaries, unless the context indicates
      otherwise.





**INDUSTRY
      BACKGROUND**





When
      online shopping emerged in the mid-1990s, there were just a handful of online
      retailers, and thus, consumers could easily check the prices of products that
      were sold on the Web by going from one store to the other and manually comparing
      prices for a product. As e-commerce evolved, more and more online retailers
      established businesses and more customers began to shop online and increase
      their online spending. With more people and money being spent online in the
      years 1998-2000, the simple task of going to a handful of online retailers
      and
      checking the price became an unmanageable task. At that same time, the first
      Internet-based shopping comparison services emerged.





Online
      shopping comparison Web sites were established to help consumers manage the
      task
      of shopping online by enabling them to find, compare, and buy products
      conveniently and efficiently. Generally speaking, they gather data from online
      retailer, either by accessing merchant’s data feeds or using search engine
      technology to “scrap” data off of merchant’s Web sites. The existing shopping
      comparison Web sites all offer quite similar functionality. Users search or
      browse for products that they desire and then receive information about the
      product and the merchants that sell it, including each merchant’s pricing. While
      these sites may offer extensive information such as a review of the product,
      side-by-side comparison of a product with similar products, etc., the most
      valued information is each retailer’s pricing for each particular item they
      sell.




3





Shopping
      comparison Web sites generate their revenue from one or more of the following
      revenue streams:




·
            Payments
                from merchants for directing traffic to their sites (Pay Per
                Click);





·
            Payments
                from merchants when a directed customer actually buys a product in
                the
                merchant’s site (Pay Per Purchase); or





·
              Other
                  advertising activities on the comparison shopping service
                  website.





Pay
      Per
      Click models are more common and the Pay Per Click revenue earned for directing
      users to shopping website tends to be high, as these users tend to be
      high-probability purchasers.





Over
      the
      years, little has changed in the way comparative shopping services function
      and
      what they offer to their users. We believe ActiveShopper's model, as described
      below, may impact the market and shift users to our more comprehensive solution.
      ActiveShopper offers simplicity to consumers without providing complex
      mechanisms and comparison data, offered by most of shopping comparison services,
      thereby protecting consumers better from pseudo-attractive buying offers
      received by email and advertising banners.





**SHELRON'S
      COMPARATIVE SHOPPING PRODUCTS**





We
      offer
      consumers a two-pronged approach to comparison shopping online - our
      ActiveShopper software product and our ActiveShopper.com Web site.





Our
      ActiveShopper software is a free software download that installs an invisible
      shopping agent, a comparison shopping toolbar on the user’s Web browser and our
      proprietary “Sidebar” product. All three of these features are integrated. Once
      installed, the ActiveShopper software detects when a user is visiting the Web
      site of any online retailer and then automatically scans, locates and compares
      prices for the item that the consumer is shopping for.





Our
      ActiveShopper Web site (located at: www.activeshopper.com ),
      answers the needs of novice and one time users who may prefer the more
      traditional comparison shopping Web site experience. By offering kinds or
      products, we attempt to meet the needs of those who may prefer to use a site,
      and those who prefer to have the price comparison process done automatically
      for
      them while they are shopping.





ActiveShopper
      is comprised of software components we purchased in March, 2004 from an
      independent and non-affiliated third party software developer for aggregate
      consideration of $150,000. We are continuously working to improve and add
      additional features and components to ActiveShopper.





In
      November, 2004, we released ActiveShopper 1.0 with a newly designed interface
      and a broader range of products for comparative shopping. With this release,
      ActiveShopper was able to provide comparative shopping information for computers
      and their peripherals and for other electronic products, such as televisions
      and
      digital cameras.





In
      December, 2004, we released ActiveShopper 1.1 which included a free text search
      field in the toolbar, allowing ActiveShopper users to search a comparative
      shopping database for products that they desire, without having to actually
      be
      in that product's page in an e-store in order to receive the relevant
      information.





In
      January, 2005, we released an enhanced version of the ActiveShopper's Web site,
      which included more user functionality and banner displays that serve as an
      additional source of revenue.





In
      March,
      2005, we released ActiveShopper 1.2 which included an additional advanced
      feature of the ActiveShopper Sidebar, a new enhancement that automatically
      displays comparative shopping results when users search for information in
      leading search engines such as Google, MSN, AOL, and Yahoo.





Currently,
      ActiveShopper's revenues are generated from: (i) ActiveShopper websites’ search
      for the United States, United Kingdom, Australia, France and Germany, with
      the
      last two still under testing and (ii) ActiveShopper Sidebar, which automatically
      displays comparative shopping results when users search for information in
      leading search engines such as Google, MSN, AOL, and Yahoo.




4




**OUR
      STRATEGY**





By
      offering two different approaches to comparison shopping, for two different
      classes of users, we attempt to maximize revenue. However, our goal is to
      increase the number of users who download and install our ActiveShopper toolbar,
      since with the toolbar we experience a much higher level of what is commonly
      referred to as “stickiness” as compared to a Web site (including our own). In
      the Internet terminology, "stickiness" refers to the level of potential
      returning visitors.





With
      all
      of our produces, we are mindful online consumers tend to return to utilize
      services of and Web sites that provide them with accurate information and ease
      of use. Thus, our objective is to enhance ActiveShopper's features and
      functionality and increase consumer awareness and usage of both our
      ActiveShopper Web site and software product. In addition, we plan to release
      new
      versions of ActiveShopper, targeting new market segments.





To
      achieve these objectives, the key elements of our strategy include the
      following:





*
      Consumer Market Analysis and our Product Features. We will seek to implement
      changes to enhance our products' features based on feedback from ActiveShopper
      users, our constant current marketing analysis and our know-how. We believe
      the
      enhancing of features and functionality of our products will add to
      ActiveShopper's competitiveness and encourage further usage.





*
      Marketing ActiveShopper through the Internet. We currently market ActiveShopper
      through Internet-based marketing campaigns, which we continuously analyze in
      order to identify efficient ways to expand our users' base. Our Internet-based
      campaigns and advertising include major first tier search engines such as Google
      and Yahoo. During 2005, we entered into agreements for the distribution of
      ActiveShopper co-branded and white label clients.





*
      Global
      Market Expansion through Strategic and Collaborative Relationships. We believe
      collaboration with leading on-line comparison shopping Web sites is an avenue
      for us to increase consumer use of our technology, increase demand for our
      services and generate revenues. ActiveShopper's technologies are currently
      implemented to analyze web pages in e-commerce sites based in the United States.
      We intend to implement ActiveShopper in additional geographic areas, including
      markets outside the United States, as part of our expanding
      strategy.





*
      Introduce New Product Applications. We believe in the concept of additional
      product applications, example of which is a mobile comparative shopping
      application, which we are presently developing.





No
      assurance can be provided that we will successfully implement all or any part
      of
      our strategy.





We
      are
      subject to significant business risks and may need to raise additional capital
      in order to realize our business plan and effectuate the above strategy.





**MARKETING
      PLAN**





To
      date,
      our efforts historically have been devoted primarily to the design, development
      and testing of ActiveShopper, as well as, raising the capital needed to develop
      and maintain our business. As a result of capital raises, our development and
      testing, as well as, our marketing efforts have significantly increased in
      scope
      and magnitude.





We
      plan
      to continue generating revenue principally from merchants in exchange of
      directing traffic to their websites through ActiveShopper.




5





Service
      providing agreements or affiliation agreements with merchants have and may
      be
      further reached directly or through third parties. We currently have agreements
      with third parties that are mainly based on a sharing revenue model.





We
      intend
      to seek out additional collaborative relationships with other on-line comparison
      shopping providers in the United Sates and abroad and other additional forms
      of
      advertising in order to generate additional revenues through ActiveShopper.
      However, except as noted above, we presently have a relatively small amount
      of
      revenue generating arrangements and no assurance can be provided that we will
      in
      fact be able to enter into such agreements or arrangements on terms that are
      commercially acceptable to us. Our success in concluding any revenue generating
      commercial agreements is premised, in part, on the further acceptance of our
      products.





**RESEARCH
      AND DEVELOPMENT**





Research
      and development expenses, as included in our statements of operations, consist
      of subcontracting personnel and related expenses of research and development
      teams in Israel and abroad. During fiscal years 2007 and 2006 we expended $5,142
      and $132,336, respectively, on research and development in connection with
      our
      ActiveShopper technologies.




**PROPRIETARY
      RIGHTS**





Protecting
      our proprietary rights, such as our brand name and our proprietary technologies,
      is critical to building consumer loyalty and attracting and retaining customers.
      We seek to protect our proprietary rights through a combination of copyright,
      trade secret, patent and trademark law, and contractual restrictions, such
      as
      confidentiality agreements and proprietary rights agreements. We enter into
      confidentiality and proprietary rights agreements with our service providers,
      and generally control access to and distribution of our proprietary information.
      Despite our efforts to protect our proprietary rights, unauthorized parties
      may
      obtain and use our intellectual property, and we cannot be certain the steps
      we
      have taken will prevent misappropriation or confusion among consumers and
      merchants. If we are unable to procure, protect and enforce our intellectual
      property rights, then we may not realize the full value of these assets, and
      our
      business may suffer.





On
      April
      18, 2005, we entered into an agreement with Infospace, Inc. to purchase the
      rights, title and interest of Infospace, Inc.'s U.S. and foreign trademarks,
      trade names and service marks for "ActiveShopper" and the domain names
      activeshopper.com, activeshopper.org, active-shop.com, active-shopper.com,
      active-shopper.net and active-shopper.org. We made a one-time payment of $40,000
      for such trademarks and domain names.





We
      do not
      currently have any additional registered trademarks. We do not currently have
      any patents on our technologies.





**COMPETITION**





The
      market for advertising and comparative shopping software products and services
      is highly competitive and we expect competition to intensify in the future.
      Our
      competitors include Web sites such as Shopping.com, Shopzilla, PriceGrabber.com,
      and Mysimon.com. Many of our competitors have longer operating histories,
      greater name recognition and significantly greater financial, technical, and
      sales and marketing resources than we have. As a result, these competitors
      are
      able to devote greater resources to the development, promotion, sale and support
      of their products. In addition, these entities have large market capitalization
      or cash reserves and are in a better position to acquire other companies in
      order to gain new technologies or products. Many of our competitors also have
      greater brand name recognition, more extensive customer bases, developed
      distribution channels and broader product offerings than we do. These companies
      can use their broad customer bases and product offerings and adopt aggressive
      pricing policies with advertisers to gain market share.




6





**EMPLOYEES
      AND CONSULTANTS**





We
      currently have one full time employee, who is our President. Our President
      also
      currently serves as one of our three Directors.





We
      presently retain five professional service providers and consultants, who
      provide services including, management, technical maintenance, marketing,
      financial accounting and administration and public relations services. These
      service providers and consultants may provide their services to us on a
      full-time, part-time, or on demand basis.





**AVAILABLE
      INFORMATION**





The
      public may read and copy any materials we file with the Securities and Exchange
      Commission ("SEC") at the SEC's Public Reference Room at 450 Fifth Street,
      N.W.,
      Washington, D.C. 20549. The public may obtain information on the operation
      of
      the Public Reference Rooms by calling the SEC at 1-800-SEC-0330. The SEC also
      maintains an Internet website that contains reports, proxy and information
      statements and other information regarding issuers that file electronically
      with
      the SEC. The SEC's Internet website is located at
      http://www.sec.gov.


7


**ITEM
      2. DESCRIPTION OF PROPERTY.**





We
      do not
      own any real property.





We
      maintain an office at 29 Broadway, New York, New York. No rent is charged for
      this space. We also lease an apartment in New York City on a month-to-month
      basis from an unaffiliated party for approximately $2,700 per month. In
      addition, on May 31, 2005, we began leasing approximately 97 (34% from 285)
      square meters of office space at 22 Raul Wallenberg Street, Tel Aviv, Israel
      from an unaffiliated party for approximately $1,900 per month in addition to
      certain occupancy and office maintenance costs. We believe that our office
      space
      in the United States and Israel is sufficient to meet our current and
      anticipated needs.




**ITEM
      3. LEGAL PROCEEDINGS.**





We
      are
      not involved in any pending legal proceedings which we anticipate can result
      in
      a material adverse effect on our business or operations.




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




None.


8


**PART
      II**





**ITEM
      5. MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS** .





The
      Company's Common Stock is listed on the OTC Bulletin Board under the symbol
      "SHRN" . The following table sets forth the high and low bid information for
      the
      Company's Common Stock for each quarterly period during the year ended December
      31, 2007 and 2006 as reported by the OTC Bulletin Board. The OTC Bulletin Board
      quotations reflect inter-dealer prices, are without retail markup, markdown
      or
      commission, and may not represent actual transactions.


High
              
              LowCalendar
                  Year 2007First
                  Quarter
              
              $
              0.024
              
              $
              0.013Second
                  Quarter
              
              $
              0.018
              
              $
              0.006Third
                  Quarter
              
              $
              0.015
              
              $
              0.005Fourth
                  Quarter
              
              $
              0.012
              
              $
              0.002Calendar
                  Year 2006First
                  Quarter
              
              $
              0.083
              
              $
              0.041Second
                  Quarter
              
              $
              0.065
              
              $
              0.032Third
                  Quarter
              
              $
              0.037
              
              $
              0.020Fourth
                  Quarter
              
              $
              0.028
              
              $
              0.015





**HOLDERS**





At
      the
      date of this filing there are approximately 362 holders of record of the
      Company's Common Stock. This does not reflect those shares held beneficially
      or
      those shares held in "street" name.





**DIVIDENDS**





Holders
      of Common Stock and Series A Preferred Stock are entitled to dividends, when,
      as, and if declared by our Board of Directors, out of funds legally available
      therefore. Except for a stock dividend distribution in August 2003 of 10,158,926
      shares of its Common Stock, we have paid no dividends on the Common Stock or
      Series A Preferred Stock and do not expect to pay cash dividends in the
      foreseeable future with respect to the Common Stock or Series A Preferred
      Stock.





It
      is the
      present policy of our Board of Directors to retain all earnings to provide
      funds
      for our growth. The declaration and payment of dividends in the future will
      be
      determined by our Board of Directors based upon our earnings, financial
      condition, capital requirements and such other factors as our Board of Directors
      may deem relevant. We are not under any contractual restriction as to our
      present or future ability to pay dividends.





**EQUITY
      COMPENSATION PLAN INFORMATION**





We
      do not
      have any existing option or equity compensation plans.





**RECENT
      SALES OF UNREGISTERED SECURITIES**





Set
      forth
      below is certain information concerning sales by us of unregistered securities
      during the three months ended December 31, 2007.





In
      January 2008, the Company issued 5,833,333 shares of its common stock to Eliron
      Yaron at $0.006 per share for gross proceeds of $35,000. The proceeds were
      received by the Company in December 2007.




9





All
      of
      the securities issued in the transactions described above were issued without
      registration under the Securities Act in reliance upon the exemption provided
      in
      Section 4(2) of the Securities Act as transactions by an issuer not involving
      a
      public offering, the issuance and sale to financially sophisticated individuals
      who are fully aware of the Company's activities, as well as its business and
      financial condition, and who acquired said securities for investment purposes
      and understood the ramifications of same.





**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS**





**FORWARD-LOOKING
      STATEMENTS**





THE
      FOLLOWING DISCUSSION AND EXPOSITIONS SHOULD BE READ IN CONJUNCTION WITH OUR
      FINANCIAL STATEMENTS AND THE NOTES RELATED TO THOSE STATEMENTS, AS WELL AS
      OTHER
      FINANCIAL INFORMATION INCLUDED IN THIS ANNUAL REPORT. SOME OF OUR DISCUSSION
      IS
      FORWARD-LOOKING AND INVOLVES RISKS AND UNCERTAINTIES. FOR INFORMATION REGARDING
      RISK FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, REFER
      TO
      RISKS ASSOCIATED WITH OUR BUSINESS SECTION OF THIS ANNUAL REPORT.




**OVERVIEW**





We
      develop e-commerce advertising and comparative shopping software products and
      services.





We
      released our initial product, ActiveShopper, in August 2004. ActiveShopper
      is a
      free software application that automatically scans, locates and compares prices
      for an item that a consumer selects at an e-commerce site and is designed to
      assist consumers to make informed purchase decisions by enabling them to find
      the items they are looking for, compare products, prices and stores, and buy
      from among thousands of online merchants. We also provide similar comparison
      shopping services at our www.activeshopper.com Web
      site.





We
      have
      been engaged in the on-line comparison shopping business since March 2004.
      Prior
      to that time, we were engaged in the field of designing and developing business
      applications software.





We
      presently generate revenues primarily from merchants in exchange of directing
      traffic to their websites through our ActiveShopper software and Web
      site.





We
      presently generate revenues primarily according to a Pay Per Click advertising
      model which compensates us for directing Web users to merchants' websites.
      We
      also implement a Pay Per Sale (Pay Per Purchase) model when a sale derives
      from
      the directing of traffic to a merchant website,





**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**





Our
      consolidated financial statements and accompanying notes have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America. The preparation of these consolidated financial statements requires
      our
      management to make estimates, judgments and assumptions that affect the reported
      amounts of assets, liabilities, revenues and expenses. We continually evaluate
      the accounting policies and estimates we use to prepare the consolidated
      financial statements. We base our estimates on historical experiences and
      assumptions believed to be reasonable under current facts and circumstances.
      Actual amounts and results could differ from these estimates made by
      management.





We
      do not
      participate in, nor have we created, any off-balance sheet special purpose
      entities or other off-balance sheet financing.




10





We
      have
      identified the accounting policies below as critical to our business operations
      and the understanding of our results of operations.





**Principles
      of consolidation** - The
      accompanying consolidated financial statements include the accounts of Shelron
      Group Inc. and its wholly-owned subsidiary (collectively, the "Company"). All
      significant inter-company transactions have been eliminated.





**Reclassifications
      -** Certain
      reclassifications have been made to prior year statements to conform to the
      current year presentation. These reclassifications have no impact on period
      reported net income or cash flow.





**Development
      Stage**





The
      Company was in the development stage from August 21, 2001 through December
      31,
      2006. The year 2007 is the first year during which it is considered an
      operating company.





**Use
      of estimates -** These
      consolidated financial statements and accompanying notes have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America. The preparation of these consolidated financial statements requires
      management to make estimates, judgments and assumptions that affect the reported
      amounts of assets, liabilities, revenues and expenses. The Company continually
      evaluates the accounting policies and estimates used to prepare the consolidated
      financial statements. The Company bases its estimates on historical experiences
      and assumptions believed to be reasonable under current facts and circumstances.
      Actual amounts and results could differ from these estimates made by
      management.





**Functional
      currency** - The
      currency of the primary economic environment in which we operate is the U.S.
      dollar, which is used as the Company's functional and reporting
      currency.





**Cash** - We
      maintain cash in bank accounts which may, at times, exceed federally insured
      limits. We have not experienced any loss on these accounts.





**Fair
      value of financial instruments** -
      Substantially all of the Company's financial instruments, consisting primarily
      of current receivables, accounts payable and accrued expenses are carried at,
      or
      approximate, fair value because of their short-term nature.





**Accounts
      receivables** -
      Accounts receivable are reported at their outstanding unpaid principal balances
      reduced by an allowance for doubtful accounts. We estimate doubtful accounts
      based on historical bad debts, factors related to specific customers' ability
      to
      pay, and current economic trends. We write off accounts receivable against
      the
      allowance when a balance is determined to be uncollectible.





**Property
      and equipment** -
      Depreciation of property and equipment is provided for by the straight-line
      method over the estimated useful lives of the related assets. Long-lived assets
      are reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of the asset may not be recoverable.





**Intangible
      assets** -
      Intangible assets are carried at cost less accumulated amortization.
      Amortization is computed on the straight-line method over the ten-year estimated
      useful life of the assets. We periodically review the carrying value of our
      intangible assets to determine whether impairment may exist. We consider
      relevant cash flow and profitability information, including estimated future
      operating results, trends and other available information, in assessing whether
      the carrying value of the intangible assets can be recovered. If it is
      determined that the carrying value of the intangible assets will not be
      recovered from the undiscounted future cash flows, the carrying value of the
      assets would be considered impaired. An impairment charge is measured as any
      deficiency in the amount of estimated fair value of the intangible assets over
      carrying value.




11





**Revenue
      recognition** - The
      Company's revenue derives from service revenue and the management of advertising
      campaigns, both of which are related to ActiveShopper.





Service
      revenue primarily derives from the implementation of partnership agreements
      according to which the Company provides a service of directing traffic to
      merchants' websites. Service revenue is primarily based on a pay-per-click
      model, reported at their net values to the Company, which represent the revenues
      the Company is entitled to receive according to the partnership agreements.
      In
      order to recognize service revenue, the following criteria must be met: (i)
      the
      partnership agreement must be signed by the customer, (ii) the signed agreement
      must specify the fees to be received for the services, (iii) the service has
      been performed and accepted by the customer, (iv) no significant Company
      obligations remain and (v) collectability is probable.





Management
      of advertising campaign revenues primarily relates to advertising through
      ActiveShopper websites. In order to recognize management of advertising
      campaigns revenue, the following criteria must be met: (i) an agreement must
      be
      signed by the customer, (ii) the signed agreement must specify the fees to
      be
      received, (iii) consultancy and management have been provided and accepted
      by
      the customer, (iv) no significant Company obligations remain and (v)
      collectability is probable.





When
      the
      above stated revenue recognition criteria are not met, the Company records
      deferred revenue.





**Research
      and development** - Costs
      incurred in connection with the research and development of the Company's
      products are expensed as incurred.





**Marketing
      and advertising** -
      Marketing and advertising costs are expensed as incurred.





**Income
      taxes** - Income
      taxes are accounted for under the liability method. Under this method, deferred
      tax assets and liabilities are recorded based on the temporary differences
      between the financial statement and the tax bases of assets and liabilities
      and
      for operating loss carryforwards measured using the enacted tax rates in effect
      for the year in which the differences are expected to reverse. The Company
      periodically evaluates whether its net deferred tax assets will be realized
      and
      records a valuation allowance if, based on the weight of available evidence,
      it
      is more likely than not that some or all of the deferred tax assets will not
      be
      realized.





**Earnings
      (loss) per share -** Basic
      earnings (loss) per share is computed by dividing net income (loss) by the
      weighted-average number of shares of Common Stock outstanding during the period.
      Diluted earnings (loss) per share give effect to dilutive convertible
      securities, options, warrants and other potential Common Stock outstanding
      during the period, only in the periods in which such effect is
      dilutive.





**Stock-based
      compensation** - In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard ("SFAS") No. 123R "Share Based Payment". This
      statement is a revision of SFAS Statement No. 123, "Accounting for Stock-Based
      Compensation" and supersedes APB Opinion No. 25, "Accounting for Stock Issued
      to
      Employees," and its related implementation guidance. SFAS 123R addresses all
      forms of share based payment ("SBP") awards including shares issued under
      employee stock purchase plans, stock options, restricted stock and stock
      appreciation rights. Under SFAS 123R, SBP awards result in a cost that will
      be
      measured at fair value on the awards' grant date, based on the estimated number
      of awards that are expected to vest and will be reflected as compensation
      expense in the financial statements. This statement is effective for public
      entities that file as small business issuers as of the beginning of the first
      interim or annual reporting period that begins after December 15, 2005, and
      as
      adopted by the Company commencing January 1, 2006.




12





Stock
      options granted to non-employees are recorded at their fair value, as determined
      in accordance with SFAS No. 123 and Emerging Issues Task Force Consensus No.
      96-18, and recognized over the related service period.





**RESULTS
      OF OPERATIONS**





Comparison
      of the Year Ended December 31, 2007 (the "2007 Period") and the Year Ended
      December 31, 2006 (the "2006 Period"):





**Revenues
      and Major Customers**





Revenues
      were primarily attributable to the implementation of partnership agreements
      pursuant to which we direct traffic to merchants' websites through our
      ActiveShopper software and Web site products. Revenues for the 2007 Period
      were
      $329,244, a decrease of $786,170 or 70% over revenues for the 2006 Period which
      were $1,115,414. The decrease in revenues is primarily attributable to decreased
      activities through ActiveShopper, as a result of the Company’s change of its
      marketing strategy during the 2007 Period. Revenues for the 2006 period include
      $72,500 which was deferred in 2005 and were primarily attributable to management
      and consulting fees provided by the Company in connection with advertising
      campaigns based on ActiveShopper.





During
      the 2007 Period, revenues generated from two customers accounted for
      approximately 97% of total revenues accounted for the period, of which one
      customer accounted for approximately 94% of total revenues for the period.
      These
      customers comprise approximately 85% of the Company's accounts receivables
      at
      December 31, 2007, of which one customer accounted for approximately 84% of
      our
      accounts receivable.





**Operating
      Expenses**





Our
      operating expenses consist of salaries, consulting expenses, research and
      development, marketing and advertising and other expenses associated with the
      operations of our business.





For
      the
      2007 Period, our operating expenses were $842,407, a decrease of 59% as compared
      to $2,040,759 for the 2006 Period. Each component of operating expenses is
      shown
      below:





**Consulting
      Expenses**





For
      the
      2007 Period and 2006 Period, our consulting expenses were $87,599 and $296,571,
      respectively. The decrease in consulting expenses of $208,972 or 70% in 2007
      is
      primarily due to the Company's decision to reduce its use of
      consultants.





**Research
      and Development Expenses**





Research
      and development expenses consist of subcontracting personnel and related
      expenses of research and development teams in Israel and elsewhere abroad.
      Research and development expenses decreased to $5,142 in the 2007 Period from
      $132,336 in the 2006 Period, a decrease of $127,194 or 96%. These amounts
      included $0 and $7,261, respectively, of non-cash expenses incurred from the
      issuance of shares of Common Stock for services rendered to the Company. The
      decrease in research and development activities is primarily attributable to
      the
      successful completion of ActiveShopper software’s first developing phase





**Employment
      Compensation**





Our
      sole
      full time employee is our President Eliron Yaron. For the 2007 Period and 2006
      Period, employment compensation totaled $174,460 and $170,792, respectively.
      The
      slight increase in employment compensation was the result of compensation paid
      to Mr. Yaron for services performed for the Israeli subsidiary for which he
      received additional compensation.





13




**Professional
      Fees**





Professional
      fees consist primarily of legal, accounting and auditing and public and investor
      relations fees. For the 2007 Period and 2006 Period, our professional fees
      were
      $78,204 and $297,044, respectively. The decrease in professional fees of
      $218,840 or 74% in 2007 is primarily due to the Company's decision to reduce
      its
      use of consultants.





**Marketing
      and Advertising**





Our
      marketing and advertising expenses for the 2007 Period and 2006 Period amounted
      to $282,721 and $840,785, respectively. The decrease in marketing and
      advertising expenses of $558,064 or 66% is principally attributable to the
      Company’s change of its marketing strategy during the 2007 Period. Management reviewed its current marketing efforts and determined it is in the
      best interest of the Company to reduce our online advertising
      activities.   Management analyzed the revenue generated from such
      advertising and determined the revenue generated is not profitable. 
Additionally, Management determined the Company has to change its toolbar
      distribution strategy and to target distributors who will work collaboratively
      with us on a revenue sharing basis.  As the result of these changes,
      revenues and marketing and advertising expenses decreased for the 2007
      Period .





**Rent
      Expense**





Rent
      expense for the 2007 Period and 2006 Period totaled $69,641 and $72,873,
      respectively, a decrease of $3,232 or approximately 4%. The decrease in rent
      expense is primarily attributable to sub-lease participation in rent expenses
      in
      connection at our Tel Aviv offices.





**Insurance
      Expense**





For
      the
      2007 Period and 2006 Period, insurance expense was $0 and $22,500 respectfully.
      The large decrease in insurance expense was related to the expiration of a
      Directors and Officers insurance policy in 2006 which was not
      renewed.





**LIQUIDITY
      AND CAPITAL RESOURCES**





To
      date,
      we have financed our operations primarily from cash generated through the sale
      of our Common Stock in private placements as well as from cash earned from
      our
      operations. As of December 31, 2007, we had a cash balance of $131,798 and
      accounts receivable of $19,741.





Cash
      used
      in operating activities was $180,933 for 2007 compared to $508,559 for 2006.
      The
      decrease in the operating cash used is primarily attributable to funding the
      net
      losses in both years.





Cash
      used
      in investing activities in 2007 was $5,352 and $421 in 2006. Cash used in 2007
      was primarily attributable to the increase of pledged deposit, as a guarantee
      of
      the lease agreement of the offices in Israel.





Cash
      provided by financing activities was $29,000 in 2007 as compared to $6,350
      in
      2006. The cash provided by financing activities in the year 2007 was from a
      payment on account of share capital and the cash provided in 2006 period was
      from the collection of a note receivable.





Our
      current operating plan is based on continuing to promote ActiveShopper
      downloads, entering into more partnership agreements and affiliation programs,
      adding more categories of product for which ActiveShopper will provide services,
      and further expanding ActiveShopper activities outside the USA. As of today,
      we
      are still depending in one main single line of business with limited revenue
      generating sources which are subjected to seasonable fluctuations.




14





Our
      relatively low operational costs and cash resources have enabled the
      continuation of our activities. Although advertising campaigns required to
      promote ActiveShopper and their related budgets may be expended at our
      discretion, competition and the need to more aggressively promote ActiveShopper
      may require higher budgets than expected and therefore negatively affect our
      cash flows.





The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern. As shown in the accompanying
      consolidated financial statements, the Company has incurred losses of $511,448,
      and $918,058 for the years ended December 31, 2007 and 2006, respectively,
      and a
      working capital deficiency which raises substantial doubt about the Company's
      ability to continue as a going concern.





Management
      believes that the company will continue to incur losses and negative cash flows
      from operating activities for the foreseeable future and will need additional
      equity or debt financing to sustain its operations until it can achieve
      profitability and positive cash flows, if ever. Management plans to seek
      additional debt and/or equity financing for the Company, but cannot assure
      that
      such financing will be available on acceptable terms. The Company's continuation
      as a going concern is dependent upon its ability to ultimately attain profitable
      operations, generate sufficient cash flow to meet its obligations, and obtain
      additional financing as may be required. The outcome of this uncertainty cannot
      be assured.





The
      accompanying consolidating financial statements do not include any adjustments
      that might result from the outcome of this uncertainty. There can be no
      assurance that management will be successful in implementing its business plan
      or that the successful implementation of such business plan will actually
      improve the Company's operating results.




**RECENTLY
      ISSUED ACCOUNTING STANDARDS**





In
      February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments" ("SFAS No. 155"). SFAS No. 155 amends SFAS No 133,
      "Accounting for Derivative Instruments and Hedging Activities", and SFAS No.
      140, "Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities". SFAS No. 155, permits fair value remeasurement
      for any hybrid financial instrument that contains an embedded derivative that
      otherwise would require bifurcation, clarifies which interest-only strips and
      principal-only strips are not subject to the requirements of SFAS No. 133,
      establishes a requirement to evaluate interest in securitized financial assets
      to identify interests that are freestanding derivatives or that are hybrid
      financial instruments that contain an embedded derivative requiring bifurcation,
      clarifies that concentrations of credit risk in the form of subordination are
      not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition
      on the qualifying special-purpose entity from holding a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. This statement is effective for all financial instruments
      acquired or issued after the beginning of the Company's first fiscal year that
      begins after September 15, 2006. SFAS No. 155 did not have a material effect
      on
      the financial position or results of operations of the Company.





In
      June
      2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109" ("FIN 48"), which
      clarifies the accounting for uncertainty in income taxes recognized in financial
      statements in accordance with FASB No. 109,"Accounting for Income Taxes". FIN
      48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. The provisions of FIN 48 are effective for fiscal years
      beginning after December 15, 2006, with the cumulative effect of the change
      in
      accounting principle recorded as an adjustment to opening retained earnings.
      FIN
      48 did not have a material effect on the financial position or results of
      operations of the Company.




15





In
      September 2006, the FASB issued Statement No. 157, "Fair Value Measurements".
      This Statement defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles and expands disclosure about
      fair value measurement. The implementation of this guidance is not expected
      to
      have any impact on the Company's consolidated financial statements.




In
      September 2006, FASB issued SFAS 158 'Employers' Accounting for Defined Benefit
      Pension and Other Postretirement Plans--an amendment of FASB Statements No.
      87,
      88, 106, and 132(R)' This Statement improves financial reporting by requiring
      an
      employer to recognize the over funded or under funded status of a defined
      benefit postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes in
      that funded status in the year in which the changes occur through comprehensive
      income of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This Statement also improves financial reporting
      by
      requiring an employer to measure the  funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. An employer with publicly traded equity securities
      is
      required to initially recognize the funded status of a defined benefit
      postretirement plan and to provide the required disclosures as of the end of
      the
      fiscal year ending after December 15, 2006. An employer without publicly traded
      equity securities is required to recognize the funded status of a defined
      benefit postretirement plan and to provide the required disclosures as of the
      end of the fiscal year ending after June 15, 2007. However, an employer without
      publicly traded equity securities is required to disclose the following
      information in the notes to financial statements for a fiscal year ending after
      December 15, 2006, but before June 16, 2007, unless it has applied the
      recognition provisions of this Statement in preparing those financial
      statements: (1) a brief description of the provisions of this Statement; (2)
      the
      date that adoption is required and (3) the date the employer plans to adopt
      the
      recognition provisions of this Statement, if earlier.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows
      entities the option to measure eligible financial instruments at fair value
      as
      of specified dates. Such election, which may be applied on an instrument by
      instrument basis, is typically irrevocable once elected. SFAS 159 is effective
      for fiscal years beginning after November 15, 2007. The implementation of this
      guidance is not expected to have any impact on the Company's consolidated
      financial statements.





In
      June 2007, the Emerging Issues Task Force ("EITF") issued EITF 07-3,
      "Accounting for Nonrefundable Advance Payments for Goods or Services to Be
      Used
      in Future Research and Development Activities," which provides guidance on
      the
      accounting for certain nonrefundable advance payments for goods or services
      that
      will be used or rendered for future research and development activities. This
      issue is effective prospectively for fiscal years beginning after
      December 15, 2007, or fiscal 2009 for the Company. The implementation of
      this guidance is not expected to have any impact on the Company's consolidated
      financial statements.





In
      December 2007, the FASB issued FAS 141(R), "Business Combinations - a
      replacement of FASB Statement No. 141", which significantly changes the
      principles and requirements for how the acquirer of a business recognizes and
      measures in its financial statements the identifiable assets acquired, the
      liabilities assumed, and any noncontrolling interest in the acquiree. The
      statement also provides guidance for recognizing and measuring the goodwill
      acquired in the business combination and determines what information to disclose
      to enable users of the financial statements to evaluate the nature and financial
      effects of the business combination. This statement is effective prospectively,
      except for certain retrospective adjustments to deferred tax balances, for
      fiscal years beginning after December 15, 2008. This statement will be effective
      for the Company beginning in fiscal 2009. The Company is currently evaluating
      FAS 141(R), and has not yet determined the impact if any, FAS 141(R) will have
      on its consolidated results of operations or financial position.





In
      December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
      Consolidated Financial Statements—an amendment of ARB No. 51. This Statement
      amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
      an
      ownership interest in the consolidated entity that should be reported as equity
      in the consolidated financial statements. In addition to the amendments to ARB
      51, this Statement amends FASB Statement No. 128, Earnings per Share; so that
      earnings-per-share data will continue to be calculated the same way those data
      were calculated before this Statement was issued. This Statement is effective
      for fiscal years, and interim periods within those fiscal years, beginning
      on or
      after December 15, 2008. The implementation of this guidance is not expected
      to
      have any impact on the Company's consolidated financial statements.




16





**ITEM
      7. FINANCIAL STATEMENTS**





The
      financials statements of our company for the years ended December 31, 2007
      and
      2006 are attached hereto following the signature page commencing on page
      F-1.




17


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





None.





**ITEM
      8A. CONTROLS AND PROCEDURES**





**EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES**





Based
      on
      an evaluation of our disclosure controls and procedures as of the end of the
      period covered by this annual report, our Principal Executive Officer who is
      also our Principal Financial Officer has concluded that our disclosure controls
      and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act
      of
      1934 (the "Exchange Act")) are effective for the purposes set forth in Rule
      13a-15(e).





**CHANGES
      IN INTERNAL CONTROL OVER FINANCIAL REPORTING**





There
      have not been any changes in our internal control over financial reporting
      identified in connection with the evaluation discussed above that occurred
      during our last fiscal year that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial reporting.





**LIMITATIONS
      ON THE EFFECTIVENESS OF INTERNAL CONTROL**





Management
      does not expect that our disclosure controls and procedures or our internal
      control over financial reporting will necessarily prevent all fraud and material
      errors. An internal control system, no matter how well conceived and operated,
      can provide only reasonable, not absolute, assurance the objectives of the
      control system are met. Further, the design of a control system must reflect
      the
      fact that there are resource constraints and the benefits of controls must
      be
      considered relative to their costs. Because of the inherent limitations on
      all
      internal control systems, no evaluation of controls can provide absolute
      assurance that all control issues and instances of fraud, if any, within the
      Company have been detected. These inherent limitations include the realities
      that judgments in decision-making can be faulty and that breakdowns can occur
      because of simple error or mistake. The design of any system of internal control
      is also based in part upon certain assumptions about the likelihood of future
      events and there can be no assurance that any design will succeed in achieving
      its stated goals under all potential future conditions. Over time, controls
      may
      become inadequate because of changes in circumstances, and/or the degree of
      compliance with the policies and procedures may deteriorate. Because of the
      inherent limitations in a cost effective internal control system, financial
      reporting misstatements due to error or fraud may occur and not be detected
      on a
      timely basis.





There
      have been no significant changes (including corrective actions with regard
      to
      significant deficiencies or material weaknesses) in our internal controls or
      in
      other factors that could significantly affect these controls subsequent to
      the
      date of the evaluation referenced in the above paragraph.




**ITEM
      8B. OTHER INFORMATION**





None.


18


**PART
      III**





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





The
      following table sets forth information concerning our Directors and Executive
      Officer:


Name
              
              Age
              
              PositionEliron
                  Yaron
              
              40
              
              Chairman,
                  Principal and
                  Principal
                  Financial And
                  Accounting OfficerIssac
                  Maizel
              
              28
              
              DirectorYossi
                  Levi
              
              28
              
              Director





Eliron
      Yaron, age 40, has been the chairman of our Board of Directors, Principal
      Executive Officer and Principal Financial and Accounting Officer since company's
      inception date in August 2001. Prior to join us, from 1996 through 2001, he
      was
      the founder and Chief Executive Officer of Shelron Internet Ltd., a web project
      oriented company. Prior to that time, since 1993, he has engaged in either
      founding web related business or working in related technology areas. Eliron
      Yaron has served on the boards of Internet companies in the US and Israel,
      and
      has advised venture capital funds and investment companies on IT and Internet
      related investments and marketing.





Isaac
      Maizel, age 28, has worked since 2001 as a computer network consultant, with
      an
      expertise in large networks implementation.





Yossi
      Levi, age 28, worked since 2001 as a E-learning consultant, and as an internet
      advertising salesman.




**THE
      COMMITTEES**





The
      Board
      of Directors does not have a Compensation, Audit or Nominating Committee, and
      the usual functions of such committees are currently performed by the Board
      of
      Directors. The Directors have determined that at present we do not have an
      audit
      committee financial expert. The Directors believe that they are capable of
      analyzing and evaluating our consolidated financial statements and understanding
      internal controls and procedures for financial reporting. In addition, we have
      been seeking and continue to seek appropriate individuals to serve on the Board
      of Directors and the Audit Committee who will meet the requirements necessary
      to
      be an independent financial expert.





**EXECUTIVE
      OFFICERS OF OUR COMPANY**





Officers
      are appointed to serve at the discretion of the Board of Directors. Mr. Eliron
      Yaron currently serves as our President and sole Executive Officer.





**CODE
      OF ETHICS**





We
      adopted a code of ethics that applies to our Principal Executive Officer and
      Principal Financial and Accounting Officer, and other persons who perform
      similar functions. A copy of our Code of Ethics is filed as an exhibit to the
      Annual Report on Form 10-KSB for the year ended December 31, 2003. Our Code
      of
      Ethics is intended to be a codification of the business and ethical principles
      which guide us, to deter wrongdoing, promote honest and ethical conduct, avoid
      conflicts of interest, and foster full, fair, accurate, timely and
      understandable disclosures, compliance with applicable governmental laws, rules
      and regulations, the prompt internal reporting of violations and accountability
      for adherence to this Code.




19





**SECTION
      16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**





Section
      16(a) of the Exchange Act requires the Company's Executive Officers, Directors
      and persons who beneficially own more than 10% of a registered class of the
      Company's equity securities to file with the Commission initial reports of
      ownership and reports of changes in ownership of Common Stock and other equity
      securities of the Company. Such persons are required by Commission regulations
      to furnish the Company with copies of all Section 16(a) forms they filed. Based
      solely upon a review of (i) Forms 3 and 4 and amendments thereto furnished
      to
      the Company pursuant to Rule 16a-3(e), promulgated under the Securities Exchange
      Act of 1934 (the "Exchange Act"), during the Company's fiscal year ended
      December 31, 2007, and (ii) Forms 5 and amendments thereto and/or written
      representations furnished to us by any Director, officer or 10% security holder
      of the Company (collectively "Reporting Persons") stating that he or she was
      not
      required to file a Form 5 during the Company's fiscal year ended December 31,
      2007, we believe that all Officers, Directors and persons who beneficially
      own
      more than 10% of a registered class of the Company's equity securities have
      met
      their reporting obligations set forth in Section 16(a) of the Exchange
      Act.





**ITEM
      10. EXECUTIVE COMPENSATION**





The
      Summary Compensation Table below sets forth compensation paid by the Company
      for
      the fiscal years ended December 31, 2007, 2006 and 2005 for services to its
      Principal Executive Officer and other Executive Officers who received a total
      annual salary and bonus which exceeded $100,000.





SUMMARY
      COMPENSATION TABLE


NAME
                  AND POSITION
              
              YEAR
              
              ANNUAL
                  AND TOTAL COMPENSATIONEliron
                  Yaron,Chairman,
                  Principal Executive
              
              
              2007
              
              $
              174,460
              (1)Officer
                  and Principal Financial
              
              
              2006
              
              $
              170,792
              (2)And
                  Accounting Officer
              
              
              2005
              
              $
              156,000




(1) Includes
      $18,449 of compensation paid by the Company's subsidiary in Israel.




( 2) Includes
      $17,149 of compensation paid by the Company's subsidiary in Israel.





Mr.
      Yaron
      did not receive a bonus or any type of other compensation, not mentioned above,
      for the three years presented.





**OPTION
      GRANTS IN 2007**





None
      of
      the Named Executive Directors were granted any options during the year ended
      December 31, 2007.





**AGGREGATE
      OPTIONS EXERCISED IN 2007 AND 2007 YEAR END VALUES**





Not
      applicable .





**EQUITY
      COMPENSATION PLAN INFORMATION**





Not
      applicable.


20


**EXECUTIVE
      EMPLOYMENT**





In
      March
      2005, we entered into a Consulting Agreement ("Consulting Agreement") with
      Hull
      Services Inc. ("Hull"), a company wholly-owned and controlled by Eliron Yaron,
      the Chairman of the Board of Directors and the Principal Executive Officer
      of
      the Company. Pursuant to the terms of this Consulting Agreement, we pay to
      Hull
      $156,000 per annum in installments of $3,000 per week for Mr. Yaron’s services,
      in addition to reimbursing all reasonable expenses incurred in connection with
      services rendered on behalf of our Company. The compensation accrues and is
      paid
      when funds for such payments are available. As of December 31, 2007, accrued
      and
      outstanding fees to Hull are $83,616. The Consulting Agreement continues in
      effect through March 2008 and contains certain customary confidentiality and
      non-compete provisions. The Consulting Agreement is renewed automatically for
      successive one year periods until either party gives the other a 180-day prior
      written notice of its intent to terminate the Consulting Agreement. As of
      December 31, 2007, no prior written notice with the intent to terminate the
      Consulting Agreement was provided. Therefore the Consulting Agreement has been
      automatically extended until March 2009.




**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





The
      following table sets forth information as of March 27, 2008, concerning all
      persons known by us to own beneficially more than 5% of our Common Stock and
      concerning shares beneficially owned by each Director and named Executive
      Officer and by all Directors and Executive Officers as a group. Unless expressly
      indicated otherwise, each stockholder exercises sole voting and investment
      power
      with respect to the shares beneficially owned.





In
      accordance with the rules of the SEC, the table gives effect to the shares
      of
      Common Stock that could be issued upon the exercise of outstanding options
      and
      common stock purchase warrants within the next 60 days. Unless otherwise noted
      in the footnotes to the table and subject to community property laws where
      applicable, the following individuals have sole voting and investment control
      with respect to the shares beneficially owned by them.





The
      address of each Executive Officer and Director is 22a Raul Wallenberg Street,
      Tel - Aviv, Israel. We have calculated the percentages of shares beneficially
      owned based on 410,840,344 shares of Common Stock outstanding at March 27,
      2008.




**Name
                and Address of**
              **Beneficial
                Owner**
            
            **Shares
                of**
              **Common
                Stock**
            
            **Percentage
                Ownership of Shares of****Common
                Stock****(1)**
            
            **Shares
                of**
              **Preferred
                Stock (2)**
            
            **Voting
                Power of Shares of****Preferred
                Stock**Executive
                Offices andDirectorsEliron
                Yaron
            
            
            34,198,833
            
            
            7.17
            %
            
            1,000,000
            
            
            52
            %Issac
                Maizel
            
            
            0
            
            
            
            
            
            0Yossi
                Levi
            
            
            0
            
            
            
            
            
            0All
                Executive Officers and Directors as a group (3 persons)
            
            
            34,198,833
            
            
            7.17
            %
            
            1,000,000
            
            
            52
            %5%
                StockholdersJoseph
                Corso
            
            
            89,000,000
            
            
            21.72
            %
            
            0
            
            
            *All
                Executive Officers, Directors and 5% Stockholders as a group (2
                persons)
            
            
            123,198,833
            
            
            28.89
            %
            
            1,000,000
            
            
            52
            %





*
      less
      than one percent (1%).




21





(1)
      Percentage of beneficial ownership as to any person as of a particular date
      is
      calculated by dividing the number of shares of Common Stock issued and
      outstanding of such person as of such date and the number of unissued shares
      as
      to which such person has the right to acquire voting and/or investment power
      within 60 days, by the total issued and outstanding shares of Common Stock
      of
      the Company at such date.





(2)
      Comprised of 1,000,000 shares of Common Stock issuable upon the conversion
      of
      1,000,000 shares of Series A Preferred Stock issued to Hull, a company
      wholly-owned and controlled by Mr. Yaron. As the sole Stockholder of Hull,
      Mr.
      Yaron may be deemed a beneficial owner of the shares of Common Stock issuable
      upon conversion of the Series A Preferred Stock.





(3)
      Derived from a Schedule 13G filed by Joseph Corso on January 4, 2007. The
      address of such person is: 15 Ottavio, Promenade, Staten Island, NY 10307,
      US.




**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





In
      March
      2005, we entered into a Consulting Agreement ("Consulting Agreement") with
      Hull
      Services Inc. ("Hull"), a company wholly-owned and controlled by Eliron Yaron,
      the Chairman of the Board of Directors and the Principal Executive Officer
      of
      the Company. Pursuant to the terms of this Consulting Agreement, we pay to
      Hull
      $156,000 per annum in installments of $3,000 per week for Mr. Yaron’s services,
      in addition to reimbursing all reasonable expenses incurred in connection with
      services rendered on behalf of our Company. The compensation accrues and is
      paid
      when funds for such payments are available. As of December 31, 2007, accrued
      and
      outstanding fees to Hull are $83,616. The Consulting Agreement continues in
      effect through March 2008 and contains certain customary confidentiality and
      non-compete provisions. The Consulting Agreement is renewed automatically for
      successive one year periods until either party gives the other a 180-day prior
      written notice of its intent to terminate the Consulting Agreement. As of
      December 31, 2007, no prior written notice with the intent to terminate the
      Consulting Agreement was provided. Therefore the Consulting Agreement has been
      automatically extended until March 2009.





On
      December 29, 2006, the Company was indebted to Hull in the amount of $444,466
      for accrued compensation and other advances to Hull as of November 30, 2006
      (the
      "Debt"). On December 29, 2006, the parties agreed to settle the Debt in exchange
      for the issuance of 63,187,111 restricted shares of the Company's Common Stock.
      Such issuance was approved by the Company's Board of Directors. On March 26,
      2007, the Company and Hull agreed to reduce the number of shares to be issued
      to
      Hull in consideration for and in settlement of the Debt from 63,187,111 to
      19,000,000. On the same date, the Company and Hull entered into an amended
      and
      restated settlement agreement to amend and supersede the terms of any previous
      settlement agreement entered into between the parties. As of December 31, 2007,
      the Company owes Hull $83,616.





The
      Company had not filed a registration statement by December 31, 2005, and
      therefore, penalties in the amount of 100,000 shares of Common Stock per each
      delaying month were incurred.




22





Penalties
      totaling $17,000, as measured at the fair value of the common stock, were
      accrued and charged to financial expenses for the three month period ended
      March
      31, 2006. On April 24, 2006, the accrued liability was reclassified as a
      contribution to capital with the elimination of the penalties by the accredited
      investor at that date.





On
      April
      24, 2006, Mr. Corso, executed a letter agreement with the Company to clarify
      and
      amend the subscription agreement and the financial advisory agreement, dated
      January 4, 2005 (the "Agreements"), a first extension letter, dated May 10,
      2005
      and a second extension letter, dated June 7, 2005 (the "Extension
      Letters"). The April 24, 2006 letter agreement serves to clarify the
      following: (i) that the Extension Letters were amendments to the Agreements
      which provided that all matters relating to the timing of the filing of the
      registration statement covering the shares issued to Mr. Corso under the
      Agreements are within the Company’s control so that the Company can use its best
      efforts to file the registration statement; (ii) that Mr. Corso irrevocably
      agreed not to rescind the Agreements, or otherwise demand repayment of the
      purchase price for the shares issued in connection with the Agreements due
      to
      Company’s failure to register the shares as was contemplated in the Agreements;
      and that (iii) any references in the Extension Letters to penalties that might
      be triggered or accrue as a result of not filing on a timely basis are
      eliminated by the letter agreement.  The $1.5 million gross proceeds
      received pursuant to the subscription agreement dated January 4, 2005, have
      been
      classified as permanent equity in the accompanying balance sheet in accordance
      with EITF D-98, on April 24, 2006.





In
      July
      2005, the Company privately placed 4,500,000 shares of its Common Stock par
      value $0.001 per share (the “Common Stock”) with an accredited investor for
      gross proceeds of $300,000 pursuant to a subscription agreement dated July
      16,
      2005. The investor has been granted piggyback registration rights.




**ITEM
      13. EXHIBITS**


Exhibit
                  Number
              
              Description3.1
              
              Certificate
                  of Incorporation of the Company. (1)3.2
              
              Bylaws
                  of the Company. (1)3.3
              
              Certificate
                  of Amendment of Certificate of Incorporation.4.1
              
              Certificate
                  of Designation of the Company.(2)10.1
              
              Stock
                  Purchase Agreement. (3)10.2
              
              Debentures
                  dated October 31, 2001. (2)10.3
              
              Subscription
                  Agreement dated as of January 4, 2005 between the Company and Joseph
                  Corso. (5)10.4
              
              Financial
                  Advisory Agreement dated as of January 4, 2005 between the Company
                  and
                  Joseph Corso. (5)10.5
              
              Consulting
                  Agreement dated as of March 1, 2005 between the Company and Hull
                  Services,
                  Inc. (5)10.6
              
              Letter
                  Agreement, dated April 24, 2006, by and between Joseph Corso and
                  Shelron
                  Group, Inc. (6)10.7
              
              Extension
                  letter, dated May 10, 2005, by Joseph Corso (6)10.8
              
              Extension
                  letter, dated June 7, 2005, by Joseph Corso (6)14
              
              Code
                  of Ethics. (4)




23




31
              
              Certification
                  of Principal Executive Officer and PrincipalFinancial Officer Pursuant
                  to
                  Section 302(a) of theSarbanes-Oxley Act of 2002.32
              
              Certification
                  of Principal Executive Officer and PrincipalFinancial Officer Pursuant
                  to
                  Section 906 of the Sarbanes-Oxley Act of
                  2002.




(1)
      This
      exhibit was filed as an exhibit to the Registration statement on Form 10-SB12G
      filed on October 11, 2000 and is incorporated herein by reference.





(2)
      This
      exhibit was filed as an exhibit to the Annual Report on Form 10-KSB filed on
      April 16, 2002 and is incorporated herein by reference.





(3)
      This
      exhibit was filed as an exhibit to the Current Report on Form 8-K filed on
      November 16, 2001 and is incorporated herein by reference.





(4)
      This
      exhibit was filed as an exhibit to the Annual Report on Form 10-KSB filed on
      May
      21, 2004 and is incorporated herein by reference.





(5)
      This
      exhibit was filed as an exhibit to the Annual Report on Form 10-KSB filed on
      April 8, 2005 and is incorporated herein by reference.





(6)
      This
      exhibit was filed as an exhibit to the Current Report on Form 8-K filed on
      May
      8, 2006 and is incorporated herein by reference.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND DIRECTOR INDEPENDENCE**





From
      July
      17, 2006 and through the subsequent periods for fiscal year ended December
      31,
      2007, our principal independent auditor was Rotenberg Meril Solomon Bertiger
      & Guttilla, P.C. ("RMSBG"). The following are the services provided and the
      amount billed:





**AUDIT
      FEES**





The
      aggregate fees billed or to be billed by RMSBG for professional services
      rendered for the audit of the Company's annual consolidated financial statements
      for the fiscal year ended December 31, 2007, and for the review of the
      consolidated financial statements included in the Company's Quarterly Reports
      on
      Form 10-QSB for the three, six and nine month periods ended March 31, 2007,
      June
      30, 2007 and September 30, 2007, respectively, during fiscal years 2007 were
      $49,800.





**AUDIT
      RELATED FEES**





Other
      than the fees described under the caption "Audit Fees" above, RMSBG did not
      bill
      any fees for services rendered to us during fiscal years 2007 and 2006 for
      assurance and related services in connection with the audit or review of our
      consolidated financial statements.





**TAX
      FEES**





There
      were no fees billed by RMSBG for tax services rendered during the fiscal years
      ended December 31, 2007 and 2006, respectively.





**ALL
      OTHER FEES**





There
      were no fees billed by RMSBG for other professional services rendered during
      the
      periods for fiscal years ended December 31, 2007 and 2006,
      respectively.




24





**PRE-APPROVAL
      OF SERVICES**





We
      do not
      have an audit committee. Our Board of Directors pre-approves all services,
      including both audit and non-audit services, provided by our independent
      accountants. For audit services, each year the independent auditor provides
      our
      Board of Directors with an engagement letter outlining the scope of the audit
      services proposed to be performed during the year, which must be formally
      accepted by the Board of Directors before the audit commences. The independent
      auditor also submits an audit services fee proposal, which also must be approved
      by the Board of Directors before the audit commences.




25


**SIGNATURES**





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





**SHELRON
      GROUP, INC.**





Dated:
      March 27, 2008





By: 
       /s/ Eliron Yaron





Eliron
      Yaron


Chairman





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report has
      been
      signed below by the following person on behalf of the Company and in the
      capacities and on the date indicated.


Signature
              
              Capacity
              
              Date/s/
                  Eliron Yaron
              
              Chairman
                  and Director
              
              March
                  27, 2008Eliron
                  YaronIssac
                  Maizel
              
              Director
              
              March
                  27, 2008Yossi
                  Levi
              
              Director
              
              March
                  27, 2008




26





**SHELRON
      GROUP INC. AND SUBSIDIARIES**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**




Report
                  of Independent Registered Public Accounting Firm
              
              
              F-2Consolidated
                  Balance Sheets as of December 31, 2007 and 2006
              
              
              F-3Consolidated
                  Statements of Operations for the years ended December 31, 2007
                  and
                  2006
              
              
              F-4Consolidated
                  Statements of Stockholders' Equity (Deficiency) the years ended
                  December
                  31, 2007 and 2006
              
              
              F-5
                  - F-6Consolidated
                  Statements of Cash Flows for the years ended December 31, 2007
                  and 2006
              
              
              F-7Notes
                  to Consolidated Financial Statements
              
              
              F-8
                  - F-21
  F-1


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




To
      the
      Directors and Stockholders of


Shelron
      Group, Inc.





We
      have
      audited the accompanying consolidated balance sheets of Shelron Group, Inc.
      and
      Subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the
      related consolidated statements of operations, changes in stockholders’ equity
      (deficiency) and cash flows for the years then ended. These consolidated
      financial statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these consolidated financial
      statements based on our audit.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. The Company
      is not required to have, nor were we engaged to perform, an audit of its
      internal control over financial reporting. Our audits included consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. An audit
      also
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the financial statements. An audit also includes assessing the
      accounting principles used and significant estimates made by management, as
      well
      as evaluating the overall financial statement presentation. We believe that
      our
      audits provides a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of the Company
      as
      of December 31, 2007 and 2006 and the results of its consolidated
      operations and cash flows for the years then ended, in conformity with
      accounting principles generally accepted in the United States of
      America.





The
      accompanying 2007 consolidated financial statements have been prepared assuming
      that the Company will continue as a going concern. As discussed in Note 1 to
      the
      consolidated financial statements, the Company’s recurring losses from
      operations, stockholders' deficiency and working capital deficiency raise
      substantial doubt about the Company’s ability to continue as a going concern.
      Management’s plans concerning these matters are also described in Note 2. The
      accompanying consolidated financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.







/s/
      Rotenberg Meril Solomon Bertiger & Guttilla, P.C.


Saddle
      Brook, New Jersey


March
      26,
      2008




F-2


SHELRON
      GROUP INC. AND SUBSIDIARIES




CONSOLIDATED
      BALANCE SHEETS




December
                  31,
              
              December
                  31,2007
              
              2006ASSETSCurrent
                  Assets:Cash
              
              $
              131,798
              
              $
              289,083Accounts
                  receivable
              
              
              19,741
              
              
              346,532Other
                  current assets
              
              
              21,007
              
              
              24,819Total
                  Current Assets
              
              
              172,546
              
              
              660,434Property
                  and Equipment, net of accumulated depreciationof
                  $174,699 and $139,612, respectively
              
              
              47,792
              
              
              82,879Intangible
                  assets, net of amortization of $10,000 and$6,000,
                  respectively
              
              
              30,000
              
              
              34,000Other
                  asset
              
              
              23,484
              
              
              18,132Deferred
                  tax asset, net of valuation allowance of $1,619,000 and $1,597,000,
                  respectively
              
              
              —
              
              
              —Total
                  Assets
              
              $
              273,822
              
              $
              795,445LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Accounts
                  payable and accrued expenses
              
              $
              105,487
              
              $
              252,783Due
                  to stockholders
              
              
              114,685
              
              
              20,065Subscription
                  Payable
              
              
              —
              
              
              6,000Total
                  Current Liabilities
              
              
              220,172
              
              
              278,848Liability
                  for common stock to be issued to officer
              
              
              35,000
              
              
              —Total
                  Liabilities
              
              
              255,172
              
              
              278,848CommitmentStockholders'
                  Equity:Series
                  A convertible preferred stock, $.001 par value, Authorized
                10,000,000
                  shares, Issued and outstanding 1,000,000 shares
              
              
              1,000
              
              
              1,000Common
                  stock, par value $.001 per shareAuthorized
                  500,000,000 shares;Issued
                  and outstanding 410,688,645 and409,789,359
                  shares, respectively
              
              
              410,688
              
              
              409,788Additional
                  paid-in capital
              
              
              5,029,445
              
              
              5,016,844Accumulated
                  deficit
              
              
              (5,422,483
              )
              
              (4,911,035
              )Total
                  Stockholders' Equity
              
              
              18,650
              
              
              516,597Total
                  Liabilities andStockholders'
                  Equity
              
              $
              273,822
              
              $
              794,445


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




F-3


SHELRON
      GROUP INC. AND SUBSIDIARIES




CONSOLIDATED
      STATEMENTS OF OPERATIONS




Year
                ended December 31,2007
            
            
            2006Revenues
            
            $
            329,244
            
            $
            1,115,414Operating
                Expenses:Consulting
                fees
            
            
            87,599
            
            
            296,571Research
                and development
            
            
            5,142
            
            
            132,336Employment
                compensation
            
            
            174,460
            
            
            170,792Professional
                fees
            
            
            78,204
            
            
            297,044Marketing
                and advertising
            
            
            282,721
            
            
            840,785Office
                and general expenses
            
            
            100,856
            
            
            162,272Rent
            
            
            69,641
            
            
            72,873Depreciation
                and amortization
            
            
            39,087
            
            
            39,630Insurance
            
            
            —
            
            
            22,500Bank
                Charges
            
            
            4,697
            
            
            5,956Total
                Operating Expenses
            
            
            842,407
            
            
            2,040,759Loss
                from operations
            
            
            (513,163
            )
            
            (925,345
            )Other
                Income (Expense):Interest
                expense
            
            
            (3,223
            )
            
            (2,479
            )Registration
                penalty
            
            
            —
            
            
            (17,000
            )Interest
                income
            
            
            4,938
            
            
            26,766Total
                Other Income (expense)
            
            
            1,715
            
            
            7,287Net
                loss
            
            $
            (511,448
            )
            $
            (918,058
            )Net
                loss applicable to common stockholders
            
            $
            (511,448
            )
            $
            (918,058
            )Basic
                and diluted net loss per share
            
            $
            (0.00
            )
            $
            (0.00
            )Weighted
                average number ofshares
                outstanding - basic and diluted
            
            
            410,481,686
            
            
            387,072,295




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





F-4


SHELRON
          GROUP INC. AND SUBSIDIARIES
   CONSOLIDATED
          STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
  Year
          2006 :
  Preferred
                    Stock
                
                
                
                Common
                    StockNumber
                  of
                  Shares
                
                Amount
                
                Price
                    Per
                  Share
                
                Number
                  of
                  Shares
                
                Amount
                
                Additional
                  Paid-in
                  Capital
                
                Accumulated
                    Deficit
                
                Stockholders'
                    Equity
                  (Deficiency)Balance
                    at December 31, 2005
                
                
                1,000,000
                
                $
                1,000
                
                
                —
                
                
                364,987,531
                
                $
                364,987
                
                $
                2,822,676
                
                $
                (3,992,977
                )
                $
                (804,314
                )Issuance
                    of common stock for debenture payable
                
                
                —
                
                
                —
                
                
                0.007
                
                
                19,000,000
                
                
                19,000
                
                
                425,466
                
                
                —
                
                
                444,466Issuance
                    of common stock for consulting fees a nd services
                
                
                —
                
                
                —
                
                
                0.01-0.05
                
                
                7,301,828
                
                
                7,301
                
                
                249,481
                
                
                —
                
                
                256,782Issuance
                    of stock options for consulting fees a nd services
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                20,721
                
                
                —
                
                
                20,721Reclassification of
                    common stock from temporary equity
                
                
                —
                
                
                —
                
                
                0.081
                
                
                18,500,000
                
                
                18,500
                
                
                1,481,500
                
                
                —
                
                
                1,500,000Forgiveness
                    of registration penalties
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                17,000
                
                
                —
                
                
                17,000Net
                    loss
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                (918,058
                )
                
                (918,058
                )Balance
                    at December 31, 2006
                
                
                1,000,000
                
                $
                1,000
                
                
                —
                
                
                409,789,359
                
                $
                409,788
                
                $
                5,016,844
                
                $
                (4,911,035
                )
                $
                516,597
  The
          accompany notes to consolidated financial statements are an integral part
          of
          these statements.
  F-5
 
 SHELRON
          GROUP INC. AND SUBSIDIARIES
  
 CONSOLIDATED
          STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
  Year
          2007 :
  Preferred
                    Stock
                
                
                
                Common
                    StockNumber
                  of
                  Shares
                
                Amount
                
                Price
                    Per
                  Share
                
                Number
                  of
                  Shares
                
                Amount
                
                Additional
                  Paid-in
                  Capital
                
                Accumulated
                    Deficit
                
                Stockholders'
                    Equity
                  (Deficiency)Balance
                    at December 31, 2006
                
                
                1,000,000
                
                $
                1,000
                
                
                —
                
                
                409,789,359
                
                $
                409,788
                
                $
                5,016,844
                
                $
                (4,911,035
                )
                $
                516,597Issuance
                    of stock options for consulting fees and services
                
                
                —
                
                
                —
                
                
                —
                
                
                899,286
                
                
                900
                
                
                12,601
                
                
                —
                
                
                13,501Net
                    loss
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                (511,448
                )
                
                (511,448
                )Balance
                    at December 31, 2007
                
                
                1,000,000
                
                $
                1,000
                
                
                —
                
                
                410,688,645
                
                $
                410,688
                
                $
                5,029,445
                
                $
                (5,422,483
                )
                $
                18,650
  The
          accompany notes to consolidated financial statements are an integral part
          of
          these statements.
  F-6


SHELRON
      GROUP INC. AND SUBSIDIARIES




CONSOLIDATED
      STATEMENTS OF CASH FLOWS


Year
                  ended December 31,2007
              
              
              2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (511,448
              )
              $
              (918,058
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Noncash
                  consulting, professional and advisory financial fees
              
              
              —
              
              
              280,132Depreciation
                  and amortization
              
              
              39,087
              
              
              39,629Changes
                  in operating assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              326,792
              
              
              (22,095
              )(Increase)
                  decrease in other current assets
              
              
              3,812
              
              
              12,964Increase
                  (decrease) in accounts payable and accrued expenses
              
              
              (133,796
              )
              
              118,745Increase
                  in due to stockholder
              
              
              94,620
              
              
              52,624Increase
                  (decrease) in deferred revenues
              
              
              —
              
              
              (72,500
              )Net
                  cash used in operating activities
              
              
              (180,933
              )
              
              (508,559
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Payment
                  of security deposit
              
              
              (5,352
              )
              
              (421
              )Net
                  cash used in investing activities
              
              
              (5,352
              )
              
              (421
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Decrease
                  in stock subscriptions payable
              
              
              (6,000
              )
              
              —Cash
                  received from officerfor common stock to be issued
              
              
              35,000
              
              
              —Cash
                  received from officer for common stock issued
              
              
              —
              
              
              6,350Net
                  cash provided by financing activities
              
              
              29,000
              
              
              6,350Net
                  (decrease) increase in cash
              
              
              (157,285
              )
              
              (502,630
              )Cash
                  at the beginning of period
              
              
              289,083
              
              
              791,713Cash
                  at the end of period
              
              $
              131,798
              
              $
              289,083




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





F-7




SUPPLEMENTAL
                  SCHEDULE OF NONCASH FINANCING ACTIVITIES:
  Consulting
                      and professional fees paid in exchange for shares of common
                      stock
              
              $
              —
              
              $
              280,132Issuance
                  of common stock for accrued consulting fees
              
              $
              13,501
              
              $
              14,372Issuance
                  of common stock for accrued compensation to a stockholder
              
              $
              —
              
              $
              444,466


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





F-8


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**




**NOTE
      1 - THE COMPANY AND ITS OPERATIONS**





In
      this
      report, the terms "we," "us" and the "Company" refer to Shelron Group, Inc.
      and
      its predecessors and subsidiaries, unless the context indicates
      otherwise.





B-Park
      Communications LLC was formed on August 21, 2001. On October 26, 2001, B-Park
      Communications LLC changed its name to B-Park Communications Inc. ("B-Park")
      and
      was incorporated in the State of Delaware. B-Park was formed for the sole
      purpose of acquiring the controlling interest in TTTTickets Holding Corp.,
      ("TTTTickets"). TTTTickets was incorporated under the laws of the State of
      Massachusetts on June 6, 1987 as Professional Brushes, Inc.





On
      November 9, 2001, B-Park, pursuant to a stock purchase agreement, acquired
      9,000,000 shares of Common Stock of TTTTickets from the controlling stockholder.
      TTTTickets formed a wholly owned subsidiary, TTTTickets Acquisition Corp.,
      a
      Delaware corporation ("Acquisition Corp."). Subsequently, pursuant to an
      Agreement of Merger dated November 9, 2001 (the "Merger Agreement"), B-Park
      was
      merged into Acquisition Corp. and Acquisition Corp. became the surviving
      corporation. The transaction was effected by the Stockholders of B-Park
      exchanging all of the outstanding shares of B-Park for 9,000,000 shares of
      Common Stock of TTTTickets. Simultaneously with the closing of the Merger
      Agreement, the sole Director of TTTTickets resigned and the Director of B-Park
      was appointed the sole member of the Board of Directors of TTTTickets. The
      Stock
      Purchase agreement and subsequent Merger Agreement effected a change in control.
      Since TTTTickets was essentially a shell corporation and since the stockholder
      of B-Park became a controlling stockholder and the Sole Director (the
      "Director"); these transactions were accounted for as a capital transaction
      accompanied by a recapitalization. The accounting was similar to a "reverse
      acquisition" except that no goodwill was recorded with B-Park being the
      accounting acquirer for financial statement purposes.





In
      September 2002, TTTTickets changed its name to Shelron Group Inc. ("Shelron").
      The Company changed its name due to the fact that it no longer operated in
      the
      business of creating a secondary marketplace for individuals to buy and sell
      event tickets on the Internet, to which the Company's former name was strongly
      associated.





During
      2004, the Company identified new business opportunities and diverted its
      development efforts and resources from the development of products integrating
      independent business applications to unify a variety of enterprise information
      and services to the development of business intelligence (BI) software,
      advertising and comparative shopping software products and services. During
      the
      second half of 2004 the Company commenced marketing its comparative shopping
      software products and services in the United States, to further market them
      worldwide.




**Development
        Stage**
 
 The
        Company was in the development stage from August 21, 2001 through December
        31,
        2006. The year 2007 is the first year during which it is considered an
        operating company.





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





The
      following accounting policies have been identified as critical to the Company's
      business operations and the understanding of its results of
      operations.




F-9


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





**Basis
      of Presentation and Principles of Consolidation**





The
      Company’s consolidated financial statements are prepared in conformity with US
      generally accepted accounting principles ("GAAP").





The
      accompanying consolidated financial statements include the accounts of Shelron
      and its wholly owned subsidiaries (collectively, the "Company"). All significant
      inter company transactions have been eliminated.





**Reclassifications
      -** Certain
      reclassifications have been made to prior year statements to conform to the
      current year presentation. These reclassifications have no impact on period
      reported net income or cash flow.




**Use
      of Estimates**





These
      consolidated  financial
      statements and accompanying notes have been prepared in accordance with
      accounting principles generally accepted in the United States of America. The
      preparation of these consolidated  financial
      statements requires management to make estimates, judgments and assumptions
      that
      affect the reported amounts of assets, liabilities, revenues and expenses.
      The
      Company continually evaluates the accounting policies and estimates used to
      prepare the consolidated financial statements. The Company bases its estimates
      on historical experiences and assumptions believed to be reasonable under
      current facts and circumstances. Actual amounts and results could differ from
      these estimates made by management.





**Functional
      Currency**





The
      currency of the primary economic environment in which the Company's operations
      are conducted is the U.S. dollar, which is used as the Company's functional
      and
      reporting currency.





**Cash**





The
      Company maintains cash in bank accounts which may, at times, exceed federally
      insured limits. The Company has not experienced any loss on these
      accounts.





**Fair
      Value of Financial Instruments**





Substantially
      all of the Company's financial instruments, consisting primarily of current
      receivables, accounts payable and accrued expenses are carried at, or
      approximate, fair value because of their short-term nature.





F-10


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





**Accounts
      Receivable**





Accounts
      receivable are reported at their outstanding unpaid principal balances reduced
      by an allowance for doubtful accounts. The Company estimates doubtful accounts
      based on historical bad debts, factors related to specific customers' ability
      to
      pay, and current economic trends. The Company writes off accounts receivable
      against the allowance when a balance is determined to be uncollectible. At
      December 31, 2007 and 2006, management considered accounts receivable to be
      fully collectible; accordingly, no allowance for doubtful accounts was provided
      for.





**Property
      and Equipment**





Depreciation
      of property and equipment is provided for by the straight-line method over
      the
      estimated useful lives of the related assets. Long-lived assets are reviewed
      for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of the asset may not be recoverable.





**Intangible
      Assets**





Intangible
      assets are carried at cost less accumulated amortization. Amortization is
      computed on the straight-line method over the ten-year estimated useful life
      of
      the assets. We periodically review the carrying value of our intangible assets
      to determine whether impairment may exist. We consider relevant cash flow and
      profitability information, including estimated future operating results, trends
      and other available information, in assessing whether the carrying value of
      the
      intangible assets can be recovered. If it is determined that the carrying value
      of the intangible assets will not be recovered from the undiscounted future
      cash
      flows, the carrying value of the assets would be considered impaired. An
      impairment charge is measured as any deficiency in the amount of estimated
      fair
      value of the intangible assets over carrying value.





**Revenue
      Recognition**





The
      Company's revenue derives from service revenue and the management of advertising
      campaigns, both of which are related to ActiveShopper.





Service
      revenue primarily derives from the implementation of partnership agreements
      according to which the Company provides a service of directing traffic to
      merchants' websites. Service revenue is primarily based on a pay-per-click
      model, reported at their net values to the Company, which represent the revenues
      the Company is entitled to receive according to the partnership agreements.
      In
      order to recognize service revenue, the following criteria must be met: (i)
      the
      partnership agreement must be signed by the customer, (ii) the signed agreement
      must specify the fees to be received for the services, (iii) the service has
      been performed and accepted by the customer, (iv) no significant Company
      obligations remain and (v) collectability is probable.





Management
      of advertising campaign revenues primarily relates to advertising through
      ActiveShopper websites. In order to recognize management of advertising
      campaigns revenue, the following criteria must be met: (i) an agreement must
      be
      signed by the customer, (ii) the signed agreement must specify the fees to
      be
      received, (iii) consultancy and management have been provided and accepted
      by
      the customer, (iv) no significant Company obligations remain and (v)
      collectability is probable.





When
      the
      above stated revenue recognition criteria are not met, the Company records
      deferred revenue.




F-11




**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





**Research
      and Development**





Costs
      incurred in connection with the research and development of the Company's
      products are expensed as incurred.





**Marketing
      and Advertising**





Marketing
      and advertising costs are expensed as incurred.





**Income
      Taxes**





Income
      taxes are accounted for under the liability method. Under this method, deferred
      tax assets and liabilities are recorded based on the temporary differences
      between the financial statement and the tax bases of assets and liabilities
      and
      for operating loss carryforward measured using the enacted tax rates in effect
      for the year in which the differences are expected to reverse. The Company
      periodically evaluates whether its net deferred tax assets will be realized
      and
      records a valuation allowance if, based on the weight of available evidence,
      it
      is more likely than not that some or all of the deferred tax assets will not
      be
      realized.





The
      company has recorded a full valuation allowance against the deferred tax asset
      arising from the operating losses incurred through December 31,
      2007.





**Earnings
      (loss) per share**





Basic
      earnings (loss) per share is computed by dividing net income (loss) by the
      weighted-average number of shares of Common Stock outstanding during the period.
      Diluted earnings (loss) per share give effect to dilutive convertible
      securities, options, warrants and other potential Common Stock outstanding
      during the period, only in periods in which such effect is dilutive. The
      following securities have been excluded from the calculation of net loss per
      share, as their effect would be antidilutive:


2007
              
              2006Series
                  A convertible preferred stock
              
              
              1,000,000
              
              
              1,000,000Options
                  (weighted average)
              
              
              0
              
              
              518,750





**Stock-based
      Compensation**





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard ("SFAS") No. 123R "Share Based Payment". This
      statement is a revision of SFAS Statement No. 123, "Accounting for Stock-Based
      Compensation" and supersedes APB Opinion No. 25, "Accounting for Stock Issued
      to
      Employees," and its related implementation guidance. SFAS 123R addresses all
      forms of share based payment ("SBP") awards including shares issued under
      employee stock purchase plans, stock options, restricted stock and stock
      appreciation rights. Under SFAS 123R, SBP awards result in a cost that will
      be
      measured at fair value on the awards' grant date, based on the estimated number
      of awards that are expected to vest and will be reflected as compensation
      expense in the financial statements. This statement is effective for public
      entities that file as small business issuers as of the beginning of the first
      interim or annual reporting period that begins after December 15, 2005, and
      as
      adopted by the Company commencing January 1, 2006.  There
      were no employee options granted in either 2007 or 2006.




F-12


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





Stock
      options granted to non-employees are recorded at their fair value, as determined
      in accordance with SFAS No. 123 and Emerging Issues Task Force Consensus No.
      96-18, and recognized over the related service period. See Note 8.





**Going
      Concern**





The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern. As shown in the accompanying
      consolidated financial statements, the Company has incurred losses of $511,448,
      and $918,058 for the years ended December 31, 2007 and 2006, respectively,
      and a
      working capital deficiency which raises substantial doubt about the Company's
      ability to continue as a going concern.





Management
      believes that the company will continue to incur losses and negative cash flows
      from operating activities for the foreseeable future and will need additional
      equity or debt financing to sustain its operations until it can achieve
      profitability and positive cash flows, if ever. Management plans to seek
      additional debt and/or equity financing for the Company, but cannot assure
      that
      such financing will be available on acceptable terms. The Company's continuation
      as a going concern is dependent upon its ability to ultimately attain profitable
      operations, generate sufficient cash flow to meet its obligations, and obtain
      additional financing as may be required. The outcome of this uncertainty cannot
      be assured.





The
      accompanying consolidating financial statements do not include any adjustments
      that might result from the outcome of this uncertainty. There can be no
      assurance that management will be successful in implementing its business plan
      or that the successful implementation of such business plan will actually
      improve the Company's operating results.




**Recently
      Issued Accounting Pronouncements**





In
      February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments" ("SFAS No. 155"). SFAS No. 155 amends SFAS No 133,
      "Accounting for Derivative Instruments and Hedging Activities", and SFAS No.
      140, "Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities". SFAS No. 155, permits fair value remeasurement
      for any hybrid financial instrument that contains an embedded derivative that
      otherwise would require bifurcation, clarifies which interest-only strips and
      principal-only strips are not subject to the requirements of SFAS No. 133,
      establishes a requirement to evaluate interest in securitized financial assets
      to identify interests that are freestanding derivatives or that are hybrid
      financial instruments that contain an embedded derivative requiring bifurcation,
      clarifies that concentrations of credit risk in the form of subordination are
      not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition
      on the qualifying special-purpose entity from holding a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. This statement is effective for all financial instruments
      acquired or issued after the beginning of the Company's first fiscal year that
      begins after September 15, 2006. SFAS No. 155 did not have a material effect
      on
      the financial position or results of operations of the Company.




F-13


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





In
      June
      2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109" ("FIN 48"), which
      clarifies the accounting for uncertainty in income taxes recognized in financial
      statements in accordance with FASB No. 109,"Accounting for Income Taxes". FIN
      48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. The provisions of FIN 48 are effective for fiscal years
      beginning after December 15, 2006, with the cumulative effect of the change
      in
      accounting principle recorded as an adjustment to opening retained earnings.
      FIN
      48 did not have a material effect on the financial position or results of
      operations of the Company.





In
      September 2006, the FASB issued Statement No. 157, "Fair Value Measurements".
      This Statement defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles and expands disclosure about
      fair value measurement. The implementation of this guidance is not expected
      to
      have any impact on the Company's consolidated financial statements.




In
      September 2006, FASB issued SFAS 158 'Employers' Accounting for Defined Benefit
      Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
      88, 106, and 132(R)' This Statement improves financial reporting by requiring
      an
      employer to recognize the over funded or under funded status of a defined
      benefit postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes in
      that funded status in the year in which the changes occur through comprehensive
      income of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This Statement also improves financial reporting
      by
      requiring an employer to measure the  funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. An employer with publicly traded equity securities
      is
      required to initially recognize the funded status of a defined benefit
      postretirement plan and to provide the required disclosures as of the end of
      the
      fiscal year ending after December 15, 2006. An employer without publicly traded
      equity securities is required to recognize the funded status of a defined
      benefit postretirement plan and to provide the required disclosures as of the
      end of the fiscal year ending after June 15, 2007. However, an employer without
      publicly traded equity securities is required to disclose the following
      information in the notes to financial statements for a fiscal year ending after
      December 15, 2006, but before June 16, 2007, unless it has applied the
      recognition provisions of this Statement in preparing those financial
      statements: (1) a brief description of the provisions of this Statement; (2)
      the
      date that adoption is required and (3) the date the employer plans to adopt
      the
      recognition provisions of this Statement, if earlier. The Company does not
      have
      a defined benefit plan and this pronouncement had no impact on the Company's
      consolidated financial statements.





FASB
      Staff Position (FSP) No. 00-19-2, Accounting for Registration Payment
      Arrangements, was issued in December 2006 to address an issuer’s accounting for
      registration payment arrangement. The FSP specifies that the contingent
      obligation to make future payments or otherwise transfer consideration under
      a
      registration payment arrangement should be separately recognized and measured
      in
      accordance with SFAS No. 5, Accounting for Contingencies. For registration
      payment arrangements and financial instruments subject to those arrangements
      that were entered into prior to the issuance of this FSP and that continues
      to
      be outstanding at the adoption date, this guidance is effective for fiscal
      years
      beginning after December 15, 2006 and interim periods within those fiscal years.
      Retrospective application of the guidance in this FSP to financial statements
      for earlier interim or annual periods presented is not permitted. The adoption
      of FSP 00-19-2 did not have
      an
      impact on our consolidated financial position, results of operations or cash
      flows.




F-14


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**





**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (Continued)**





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows
      entities the option to measure eligible financial instruments at fair value
      as
      of specified dates. Such election, which may be applied on an instrument by
      instrument basis, is typically irrevocable once elected. SFAS 159 is effective
      for fiscal years beginning after November 15, 2007. The implementation of this
      guidance is not expected to have any impact on the Company's consolidated
      financial statements.





In
      June 2007, the Emerging Issues Task Force ("EITF") issued EITF 07-3,
      "Accounting for Nonrefundable Advance Payments for Goods or Services to Be
      Used
      in Future Research and Development Activities," which provides guidance on
      the
      accounting for certain nonrefundable advance payments for goods or services
      that
      will be used or rendered for future research and development activities. This
      issue is effective prospectively for fiscal years beginning after
      December 15, 2007, or fiscal 2009 for the Company. The implementation of
      this guidance is not expected to have any impact on the Company's consolidated
      financial statements.





In
      December 2007, the FASB issued FAS 141(R), "Business Combinations - a
      replacement of FASB Statement No. 141", which significantly changes the
      principles and requirements for how the acquirer of a business recognizes and
      measures in its financial statements the identifiable assets acquired, the
      liabilities assumed, and any noncontrolling interest in the acquiree. The
      statement also provides guidance for recognizing and measuring the goodwill
      acquired in the business combination and determines what information to disclose
      to enable users of the financial statements to evaluate the nature and financial
      effects of the business combination. This statement is effective prospectively,
      except for certain retrospective adjustments to deferred tax balances, for
      fiscal years beginning after December 15, 2008. This statement will be effective
      for the Company beginning in fiscal 2009. The Company is currently evaluating
      FAS 141(R), and has not yet determined the impact if any, FAS 141(R) will have
      on its consolidated results of operations or financial
      position.





In
      December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
      Consolidated Financial Statements—an amendment of ARB No. 51. This Statement
      amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
      an
      ownership interest in the consolidated entity that should be reported as equity
      in the consolidated financial statements. In addition to the amendments to
      ARB
      51, this Statement amends FASB Statement No. 128, Earnings per Share; so that
      earnings-per-share data will continue to be calculated the same way those data
      were calculated before this Statement was issued. This Statement is effective
      for fiscal years, and interim periods within those fiscal years, beginning
      on or
      after December 15, 2008. The implementation of this guidance is not expected
      to
      have any impact on the Company's consolidated financial
      statements.





F-15


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**




**NOTE
      3 - PROPERTY AND EQUIPMENT**





Property
      and equipment, at cost, at December 31, 2007 and 2006 consists of:


December
                  31,
              
              2007
              
              2006
              
              useful
                  lifeSoftware
              
              $
              150,000
              
              $
              150,000
              
              
              5
                  yearsOffice
                  Equipment
              
              
              24,725
              
              
              24,725
              
              
              3-7
                  yearsComputer
                  Equipment
              
              
              24,360
              
              
              24,360
              
              
              3
                  yearsFurniture
                  and fixtures
              
              
              23,406
              
              
              23,406
              
              
              5-10
                  years222,491
              
              
              222,491Less
                  - accumulated depreciationand
                  amortization
              
              
              174,699
              
              
              139,612$
              47,792
              
              $
              82,879





Depreciation
      and amortization expense amounted to $39,087 and $39,630 for the years ended
      December 31, 2007 and 2006, respectively.





**NOTE
      4 - INTANGIBLE ASSETS**





On
      April
      18, 2005, the Company entered into an agreement with Infospace, Inc. to purchase
      the rights, title and interest of Infospace, Inc. in the U.S. and foreign
      trademarks, trade names and service marks for "ActiveShopper" and the domain
      names activeshopper.com, activeshopper.org, active-shop.com, active-shopper.com,
      active-shopper.net and active-shopper.org. The Company made a one-time payment
      of $40,000. The trademarks and domain names are being amortized on a
      straight-line basis over ten years.





Amortization
      totaled $4,000 and $4,000 for the years ended December 31, 2007 and 2006,
      respectively. Amortization for the next five years and thereafter is expected
      to
      be as follows: $4,000 for the years 2008 through 2012 and $10,000
      thereafter.





**NOTE
      5 - DUE TO STOCKHOLDERS AND RELATED PARTIES**





Hull
      Services, Inc. ("Hull")





The
      Company is controlled by Hull, a company wholly-owned by the Company's Principal
      Executive Officer/Principal Financial and Accounting officer. In March 2005,
      the
      Company entered into a consulting agreement with Hull. Pursuant to the terms
      of
      the agreement, Hull receives consulting fees totaling $156,000 per annum in
      installments of $3,000 per week. Due to stockholder represents accrued but
      unpaid consulting as well as other loans payable made by Hull. On August 9,
      2005, the Company received written notice from Hull that Hull desired to convert
      the balance due into shares of the Company's Common Stock. The Company and
      Hull
      reached an agreement on December 29, 2006. The Company issued Hull 19,000,000
      restricted shares of Common Stock valued at $444,466 in consideration of accrued
      consulting services and other loans payable.




F-16


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
      31, 2007 and 2006**




**NOTE
      5 - DUE TO STOCKHOLDERS AND RELATED PARTIES (Continued)**





For
      each
      of the years ended December 31, 2007 and 2006, consulting services totaled
      $156,000. Such amounts are reflected on the statements of operations as
      employment compensation. At December 31, 2007 and 2006, the Company owed Hull
      $83,616 and $4,467, respectively.





Eliron
      Yaron





Mr.
      Yaron
      is the Company's Principal Executive Officer/Principal Financial and Accounting
      Officer. At December 31, 2007, Mr. Yaron was owed $31,070. At
      December 31, 2006, Mr. Yaron was owed $15,598.





Issuance
      of shares of Common Stock to officer





In
      January 2008, the Company issued 5,833,333 shares of its common stock to Eliron
      Yaron at $0.006 per share for gross proceeds of $35,000. The proceeds were
      received by the Company in December 2007. As the shares were not issued until
      January 2008, such proceeds were not included in stockholders'
      equity.





**NOTE
      6 - STOCKHOLDERS' EQUITY**





**Convertible
      Preferred Stock**





On
      November 8, 2001, the Company filed a Certificate of Designation with the State
      of Delaware authorizing the issuance of one series of Preferred Stock (the
      "Series A Preferred Stock") consisting of 1,000,000 shares. All 1,000,000 shares
      of Series A Preferred Stock were issued to Hull. The holder of the Series A
      Preferred Stock is entitled to vote along with the holders of Common Stock
      as
      one class on all matters for which the Stockholders of the Company shall vote.
      The holder of Series A Preferred Stock is entitled to a vote representing 52%
      of
      the total shares entitled to vote by all holders of the then outstanding shares
      of Common Stock and Series A Preferred Stock combined. Each share of the Series
      A Preferred Stock is convertible at the option of the holder into one share
      of
      Common Stock upon not less than 15 days and not more than 30 days notice to
      the
      Company. In addition, if all or substantially all of the Company's assets or
      all
      of the outstanding shares of the Company are sold, the shares of Series A
      Preferred Stock automatically convert to Common Stock.





**Common
      Stock** - **Private
      Placements**





In
      January 2005, the Company privately placed 18,500,000 shares of its Common
      Stock
      par value $0.001 per share (the "Common Stock") with an accredited investor
      for
      gross proceeds of $1.5 million pursuant to a subscription agreement dated
      January 4, 2005. Under the terms of the subscription agreement, the Company
      agreed to file a registration statement under the Securities Act of 1933, as
      amended covering the resale of the shares within 90 days of the closing date,
      which period had been subsequently extended to December 31, 2005. If the Company
      did not file the registration statement by such date, then it may be liable
      for
      penalties. By December 31, 2005, the Company had not filed the registration
      statement and therefore penalties were incurred in the amount of 100,000 shares
      of Common Stock per each delaying month. The $1.5 million gross proceeds had
      been classified as temporary equity in the balance sheet as of December 31,
      2005, in accordance with EITF Topic D-98, since at December 31, 2005, the shares
      were subject to registration rights and the indicated penalties.




F-17


**SHELRON
        GROUP INC. AND SUBSIDIARIES**
  **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
        31, 2007 and 2006**


P enalties
      totaling $17,000, as measured at the fair value of the Common Stock, were
      accrued and charged to financial expenses for the three month period ended
      March
      31, 2006. On April 24, 2006, the accrued liability was reclassified as a
      contribution to capital with the elimination of the penalties by the accredited
      investor at that date.





On
      April
      24, 2006, Mr. Joseph Corso, executed a letter agreement with the Company to
      clarify and amend the Subscription Agreement and the Financial Advisory
      Agreement, dated January 4, 2005 (the "Agreements"), a first extension letter,
      dated May 10, 2005 and a second extension letter, dated June 7, 2005 (the
      "Extension Letters"). The letter agreement serves to clarify the following:
      (i)
      that the Extension Letters were amendments to the Agreements to provide that
      all
      matters relating to the timing of the filing of the registration statement
      covering the shares issued to Mr. Corso under the Agreements are within the
      Company's control, so that the Company can use its best efforts to file the
      registration statement; (ii) that Mr. Corso has irrevocably agreed not to
      rescind the Agreements, or otherwise demand repayment of the purchase price
      for
      the shares issued in connection with the Agreements due to Company's failure
      to
      register the shares as was contemplated in the Agreements; and that (iii) any
      references in the extension letters to penalties that may be triggered or accrue
      as a result of not filing on a timely basis are eliminated by this letter
      agreement.  The
      $1.5
      million gross proceeds received pursuant to the subscription agreement dated
      January 4, 2005, have been classified as permanent equity in the accompanying
      balance sheet in accordance with EITF Topic D-98, on April 24,
      2006.





In
      connection with the subscription agreement described above, the Company entered
      into a financial advisory agreement with the investor, pursuant to which the
      investor has provided the Company with general financial consulting services,
      including, assistance with capital-raising activities, and identification of
      possible merger and acquisition candidates. In consideration of such services,
      the Company paid the investor a one-time consulting fee of 4,000,000 shares
      of
      its Common Stock. The Company also undertook to file a registration statement
      covering the resale of these shares by December 31, 2005.




In
      addition, in connection with the subscription agreement described above, the
      Company entered into a finder's agreement pursuant to which the Company issued
      850,000 shares of its Common Stock to an individual as compensation for that
      individual's services in introducing the Company to the investor and the
      consummation of the transaction described above.





On
      June
      6, 2005, pursuant to signed subscription agreement, the Company issued 2,000,000
      shares of Common Stock to an accredited investor for proceeds of $33,650 and
      a
      note receivable of $6,350 in the aggregate.





In
      July
      2005, the Company privately placed 4,500,000 shares of its Common Stock par
      value $0.001 per share (the "Common Stock") with an accredited investor for
      gross proceeds of $300,000 pursuant to a subscription agreement dated July
      16,
      2005. The investor has been granted piggyback registration rights. The Company
      sold the shares of Common Stock to the investors in reliance upon the exemption
      from registration afforded by Section 4(2) of the Securities Act of 1933, as
      amended, and Regulation D promulgated thereunder. Also
      in
      connection with the subscription agreement described above, the Company entered
      into a finder's agreement pursuant to which the Company issued 200,000 shares
      of
      its Common Stock to an individual as compensation for that individual's services
      in introducing the Company to the investor and the consummation of the
      transaction described above.





All
      of
      the above issuances of the Company's shares of Common Stock were affected
      without registration in reliance upon the exemption therefrom afforded by
      Section 4(2) of the Securities Act of 1933, as amended, and Regulation D
      promulgated thereunder.




F-18




**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
        31, 2007 and 2006**


**NOTE
      6 - STOCKHOLDERS' EQUITY (Continued)**





**Issuance
      of shares of Common Stock for services received**





During
      the year ended December 31, 2007, the Company issued 899,286 shares of its
      Common Stock to one service provider in consideration of services rendered
      totaling $13,501.





During
      the year ended December 31, 2006, the Company issued 7,301,828 shares of its
      Common Stock to five service providers in consideration of services rendered
      totaling $256,782.





Subsequent
      to December 31, 2007 and through March 28, 2008, the Company issued 151,699
      shares of Common Stock to one service provider in consideration of services
      rendered totaling $625.





**Issuance
      of shares of Common Stock for a note payable**





During
      the year ended December 31, 2005, the Company issued 90,000 shares of its Common
      Stock to a holder of a note payable in the equivalent of $9,000.





**NOTE
      7 - STOCK BASED COMPENSATION**





During
      2006, the Company granted 675,000 share options to a consultant in connection
      with services provided by the consultant to the Company during the period
      commencing January 15, 2006 through May 15, 2006. According to the agreements
      entered into with the consultant, 150,000 share options were granted at the
      end
      of each month from January through April 2006 and 75,000 share options were
      granted at May 15, 2006. All share options vested in 2006. The exercise price
      of
      the options is $0.04 with an expiration date of March 31, 2007. Consulting
      fees
      in the amount of $20,721 were charged to expense according to the fair value
      of
      each option as estimated under a Black-Scholes option pricing model. The
      following assumptions were used: risk-free interest rate of 4.58% to 4.97%;
      no
      dividend yield; an expected life of the options of 11 to 14 months; and a
      volatility factor of 106.2% to 145.2%. The weighted average grant-date fair
      value of the share options is $0.031.





With
      the
      exception of the aforementioned share options grant, the Company granted no
      additional share options during fiscal year 2007 or 2006.





As
      of
      December 31, 2007, no share options have been exercised.





**NOTE
      8 - REVENUE AND MAJOR CUSTOMERS**





During
      the years ended December 31, 2007 and 2006, revenues in the amount of $329,244
      and $1,115,414 were generated from the implementation of partnership agreements
      according to which traffic is directed to merchants' websites through
      ActiveShopper.




During
      the year ended December 31, 2007, revenues generated from two customers
      accounted for approximately 97% of total revenues accounted for the year, of
      which one customer accounted for approximately 94% of total revenues accounted
      for the year. These customers comprise approximately 85% of the Company's
      accounts receivables at December 31, 2007, of which one customer accounted
      for
      approximately 84% of accounts receivable at December 31, 2007.




F-19


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
        31, 2007 and 2006**


**NOTE
      8 - REVENUE AND MAJOR CUSTOMERS (Continued)**





During
      the year ended December 31, 2006, revenues generated from two customers
      accounted for approximately 98% of total revenues accounted for the year, of
      each one customer accounted approximately 82% of total revenues accounted for
      the year. These customers comprise approximately 98% of the Company's accounts
      receivables at December 31, 2006, of which one customer accounted for
      approximately 81% of accounts receivable at December 31, 2006.





Revenues
      were earned in the following countries:


2007
              
              2006United
                  States
              
              $
              317,234
              
              $
              1,000,064United
                  Kingdom
              
              
              10,868
              
              
              115,294Others
              
              
              1,142
              
              
              56Total
              
              $
              329,244
              
              $
              1,115,414





**NOTE
      9 - INCOME TAXES**





The
      Company files its tax returns in the United States while its subsidiary files
      tax returns in Israel.





The
      deferred income tax assets at December 31, 2007 and 2006 relate to temporary
      differences between the financial statement carrying amounts and their tax
      basis. Assets that give rise to the deferred tax assets are as follows at
      December 31:


2007
              
              2006Net
                  operating loss carry forwards
              
              $
              1,619,000
              
              $
              1,597,000Valuation
                  allowance
              
              
              (1,619,000
              )
              
              (1,597,000
              )Net
                  income tax assets
              
              $
              -
              
              $
              -





A
      valuation allowance has been established equal to the full amount of the
      deferred tax assets as the Company is not assured at December 31, 2007 and
      2006
      that it is more likely than not that these benefits will be realized.





The
      change in valuation allowance for the years ended December 31, 2007 and 2006
      was
      an increase of $22,000 and $308,000, respectively, due to increases in net
      operating loss carry forwards.





At
      December 31, 2007, the Company has unused United States federal net operating
      loss carry forwards of approximately $4,409,000 expiring between 2021 and 2027
      and unused Israel net operating loss carry forwards of approximately $91,000.
      The Israeli net operating loss carryforwards do not expire.




F-20


**SHELRON
      GROUP INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
        31, 2007 and 2006**


**NOTE
      10 - COMMITMENTS**





The
      Company leases an apartment in New York from an unaffiliated party for
      approximately $2,700 per month on a month-to-month basis. In addition, on May
      31, 2005, the Company began leasing approximately 130 square meters of office
      space at 22 a Raul Wallenberg Street, Tel Aviv, Israel from an unaffiliated
      party for approximately $1,800 per month in addition to certain occupancy and
      office maintenance costs. The lease expires in May 2008 (the subsidiary is
      in a
      negotiation process with the offices landlord, in order to extend the lease
      period by additional three years).





Future
      minimum lease payments for the office in Israel are as follows:


2008
              
              $
              22,0002009
              
              
              25,000Total
              
              $
              47,000





Rent
      expense for the years ended December 31, 2007 and 2006 totaled $69,641 and
      $72,873, respectively.





**NOTE
      11 - SUBSEQUENT EVENTS**





Subsequent
      to December 31, 2007 and through March 26, 2008, the Company issued 151,699
      shares of common stock to one service provider in consideration of services
      rendered totaling $625.




F-21