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**SHELBY      ACQUISITION II, INC.**

**-      INDEX -**

|                                                                                                                                       | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **PART                I- FINANCIAL INFORMATION:**                                                                                          |   |
|                                                                                                                                       |   |
| Item                1. Financial Statements                                                                                                |   |
|                                                                                                                                       |   |
| Balance                Sheet as of April 30, 2008 (Unaudited)                                                                              | F-1    |
|                                                                                                                                       |   |
| Statements                of Operations (Unaudited) for the Three and Nine Months Ended April                30,                           | F-2    |
| 2008,                the Period from Inception (February 1, 2007) to April 30, 2007 and                for                the              |   |
| Cumulative                Period from Inception (February 1, 2007) to April 30, 2008                                                       |   |
|                                                                                                                                       |   |
| Statement                of Stockholder’s Equity (Deficit) (Unaudited) for the Period                from Inception        | F-3    |
| (February                1, 2007) to April 30, 2008                                                                                        |   |
|                                                                                                                                       |   |
| Statements                of Cash Flows (Unaudited) for the Nine Months Ended April 30, 2008,                the                           | F-4    |
| Period                from Inception (February 1, 2007) to April 30, 2007 and for the                Cumulative                            |   |
| Period                from Inception (February 1, 2007) to April 30, 2008                                                                  |   |
|                                                                                                                                       |   |
| Notes                to Financial Statements (Unaudited)                                                                                   | F-5    |
|                                                                                                                                       |   |
| Item                2. Management's Discussion and Analysis of Financial Condition and                Results                of Operations | 1      |
|                                                                                                                                       |   |
| Item                3A(T). Controls and Procedures                                                                                         | 3      |
|                                                                                                                                       |   |
| **PART                II – OTHER INFORMATION:**                                                                                      |   |
|                                                                                                                                       |   |
| Item                1. Legal Proceedings                                                                                                   | 3      |
|                                                                                                                                       |   |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds                                          | 3      |
|                                                                                                                                       |   |
| Item                3. Defaults Upon Senior Securities                                                                                     | 3      |
|                                                                                                                                       |   |
| Item                4. Submission of Matters to a Vote of Security Holders                                                                 | 3      |
|                                                                                                                                       |   |
| Item                5. Other Information                                                                                                   | 3      |
|                                                                                                                                       |   |
| Item                6. Exhibits                                                                                                            | 4      |
|                                                                                                                                       |   |
| Signatures                                                                                                                                 | 5      |

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**PART      I – FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

**SHELBY      ACQUISITION II, INC.**

**(A      Development Stage Company)**

**BALANCE      SHEET**

**(Unaudited)**

|  **ASSETS**                                                                                                                                |   |   |      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|
| **CURRENT                ASSETS**                                                                                                               |   |   |      |   |
| **Cash                and cash equivalents**                                                                                                    |   | $      | 1,611     |   |
|                                                                                                                                            |   |   |      |   |
| **TOTAL                ASSETS**                                                                                                                 |   | **$**  | **1,611** |   |
|                                                                                                                                            |   |   |      |   |
| **LIABILITIES                & STOCKHOLDER'S DEFICIT**                                                                                      |   |   |      |   |
| **CURRENT                LIABILITIES**                                                                                                          |   |   |      |   |
| **Accrued                professional fees**                                                                                                    |   | $      | 8,675     |   |
| **Due                to Stockholder**                                                                                                           |   |   | 18,750    |   |
|                                                                                                                                            |   |   |      |   |
| **TOTAL                LIABILITIES**                                                                                                            |   |   | 27,425    |   |
|                                                                                                                                            |   |   |      |   |
| **STOCKHOLDER'S                DEFICIT**                                                                                                        |   |   |      |   |
| **Preferred                Stock, .0001 par value; 10,000 shares authorized; none issued and                outstanding**                       |   |   | —   |   |
| **Common                Stock, .0001 par value; 100,000,000 shares authorized; 5,000,000                issued                and outstanding** |   |   | 500       |   |
| **Additional                paid-in capital**                                                                                                   |   |   | 24,500    |   |
| **Deficiency                accumulated during development stage**                                                                              |   |   | (50,814   | )      |
|                                                                                                                                            |   |   |      |   |
| **TOTAL                STOCKHOLDER'S DEFICIT**                                                                                                  |   |   | (25,814   | )      |
|                                                                                                                                            |   |   |      |   |
| **TOTAL                LIABILITIES & STOCKHOLDER'S DEFICIT**                                                                                |   | **$**  | **1,611** |   |

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**SHELBY      ACQUISITION II, INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF OPERATIONS**

**(Unaudited)**

|                                                                                                          |   | **For the****Three****Months****Ended****April 30,****2008** |          | **For the****Nine****Months****Ended****April 30,****2008** |   | **For the****Cumulative****Period****from****Inception****(February****1, 2007)****April 30,****2008** |   | **For the****Period****from****Inception****(February****1, 2007)****to April****30, 2007** |          |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|---------------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|---------------|
|                                                                                                          |   |                                                                   |          |                                                                  |   |                                                                                                                  |   |                                                                                                            |          |
| **Revenue**                                                                                                   |   | **$**                                                                  | **-**         |                                                                  | **$**  | **-**                                                                                                                 |   | **$**                                                                                                           | **-**         |   | **$** | **-** |   |
| **General                and Administrative Expenses**                                                        |   |                                                                   | 2,877         |                                                                  |   | 37,647                                                                                                                |   |                                                                                                            | 50,814        |   |   | — |   |
|                                                                                                          |   |                                                                   |          |                                                                  |   |                                                                                                                  |   |                                                                                                            |          |   |   |   |   |
| **Net                Loss**                                                                                   |   | **$**                                                                  | **(2,877**    | **)**                                                                 | **$**  | **(37,647**                                                                                                           | **)**  | **$**                                                                                                           | **(50,814**   | **)** | **$** | **-** |   |
|                                                                                                          |   |                                                                   |          |                                                                  |   |                                                                                                                  |   |                                                                                                            |          |   |   |   |   |
|                                                                                                          |   |                                                                   |          |                                                                  |   |                                                                                                                  |   |                                                                                                            |          |   |   |   |   |
| **Basic                and Diluted Net Loss Per Share**                                                       |   | **$**                                                                  | **(0.01**     | **)**                                                                 | **$**  | **(0.01**                                                                                                             | **)**  | **$**                                                                                                           | **(0.01**     | **)** | **$** | **(0.00** | **)** |
|                                                                                                          |   |                                                                   |          |                                                                  |   |                                                                                                                  |   |                                                                                                            |          |   |   |   |   |
| **Number                  of Shares Used in Computing Basic and Diluted Net Loss Per                  Share** |   |                                                                   | **5,000,000** |                                                                  |   | **5,000,000**                                                                                                         |   |                                                                                                            | **5,000,000** |   |   | **5,000,000** |   |

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**SHELBY      ACQUISITION II, INC.**

**(A      Development Stage Company)**

**STATEMENT      OF STOCKHOLDER’S EQUITY (DEFICIT)**

**(Unaudited)**

|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   | **Deficit**     |   |          |       |
|------------------------------------------------------------------|--------|------------------------------------------|-------------|---------------------------------------|--------|----------------------------------|--------|-----------------|---------------|-------------------|--------|-----------------|--------|---------------|------------|
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   | **Accumulated** |   |          |       |
|                                                             |   |                                     |        |                                  |   | **Additional**                   |   | **During**      |          | **Stockholder's** |   |
|                                                             |   | **Preferred                      Stock** |        | **Common                      Stock** |   | **Paid                      In** |   | **Development** |          | **Equity**        |   |
|                                                             |   | **Shares**                               |        | **Amount**                            |   | **Shares**                       |   | **Amount**      |          | **Capital**       |   | **Stage**       |   | **(Deficit)** |       |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |
| **BALANCE                        AT FEBRUARY 1, 2007 INCEPTION** |   |                                     | —     |                                  | $      | -                                |   |            | —       |              | $      | -               |   | $             | -          |   | $ | - |   | $ | - |   |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| Issuance                      of Common Stock                    |   |                                     | —     |                                  |   | -                                |   |            | 5,000,000     |              |   | 500             |   |          | 24,500     |   |   | — |   |   | 25,000 |   |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| Net                      loss                                    |   |                                     | —     |                                  |   | -                                |   |            | —       |              |   | —         |   |          | —    |   |   | (13,167 | ) |   | (13,167 | ) |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| **Balance                      as of July 31, 2007**             |   |                                     | **—** |                                  |   | **-**                            |   |            | **5,000,000** |              |   | **500**         |   |          | **24,500** |   |   | **(13,167** | **)** |   | **11,833** |   |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| Net                      loss for period 8/1/07 through 10/31/07 |   |                                     | —     |                                  |   | -                                |   |            | —       |              |   | —         |   |          | —    |   |   | (3,675 | ) |   | (3,675 | ) |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| **Balance                      as of October 31, 2007**          |   |                                     | —     |                                  |   | —                          |   |            | **5,000,000** |              |   | **500**         |   |          | **24,500** |   |   | **(16,842** | **)** |   | **8,158** |   |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| Net                      loss for period 11/1/07 through 1/31/08 |   |                                     | —     |                                  |   | —                          |   |            | —       |              |   | —         |   |          | —    |   |   | (31,095 | ) |   | (31,095 | ) |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| **Balance                      as of January 31, 2008**          |   |                                     | **—** |                                  | **$**  | **-**                            |   |            | **5,000,000** |              |   | **500**         |   |          | **24,500** |   |   | **(47,937** | **)** |   | **(22,937** | **)** |
|                                                             |   |                                     |        |                                  |   |                             |   |            |          |              |   |            |   |          |       |   |   |   |   |   |   |   |
| Net                      loss for period 2/1/08 through 4/30/08  |   |                                     | —     |                                  |   | —                          |   |            | —       |              |   | —         |   |          | —    |   |   | (2,877 | ) |   | (2,877 | ) |
| **Balance                      as of April 30, 2008**            |   |                                     | **—** |                                  | **$**  | **-**                            |   |            | **5,000,000** |              | **$**  | **500**         |   | **$**         | **24,500** |   | **$** | **(50,814** | **)** | **$** | **(25,814** | **)** |

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**SHELBY      ACQUISITION II, INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF CASH FLOWS**

**(Unaudited)**

|                                                                                                    |   | **For the ****Nine****Months****Ended****April 30, 2008** |      | **For the ****Cumulative ****Period from**** Inception ****(February 1,****2007)****to April 30, 2008** |   | **For the ****Period from**** Inception ****(February 1,****2007)****to April 30,****2007** |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                                                 |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **Net                Loss**                                                                             |   | $                                                                             | (37,647   | )                                                                                                                                                         | $      | (50,814                                                                                                                             | )      | $ |  |   |
| **Adjustments                  to reconcile Net Loss to net cash used in                  operations:** |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
|  **Accrued                Professional Fees**                                                      |   |                                                                          | 8,675     |                                                                                                                                                      |   | 8,675                                                                                                                               |   |   | — |   |
| **Net                cash used in Operating Activities**                                                |   |                                                                          | (28,972   | )                                                                                                                                                         |   | (42,139                                                                                                                             | )      |   | — |   |
|                                                                                                    |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                 |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **Additional                Paid in Capital**                                                           |   |                                                                          | 18,750    |                                                                                                                                                      |   | 18,750                                                                                                                              |   |   | — |   |
| **Loans                from Affiliate**                                                                 |   |                                                                          | (592      | )                                                                                                                                                         |   | 0                                                                                                                                   |   |   | — |   |
| **Proceeds                from Issuance of Common Stock**                                               |   |                                                                          | 0         |                                                                                                                                                      |   | 25,000                                                                                                                              |   |   | 25,000 |   |
| **Net                cash provided by Financing Activities**                                            |   |                                                                          | 18,158    |                                                                                                                                                      |   | 43,750                                                                                                                              |   |   | 25,000 |   |
|                                                                                                    |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **Net                (decrease) increase in cash and cash equivalents for                period**       |   |                                                                          | (10,814   | )                                                                                                                                                         |   | 1,611                                                                                                                               |   |   | 25,000 |   |
|                                                                                                    |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **Cash                and cash equivalents at beginning of period**                                     |   |                                                                          | 12,425    |                                                                                                                                                      |   | —                                                                                                                             |   |   | — |   |
|                                                                                                    |   |                                                                          |      |                                                                                                                                                      |   |                                                                                                                                |   |   |   |   |
| **Cash                and cash equivalents at end of period**                                           |   | **$**                                                                         | **1,611** |                                                                                                                                                      | **$**  | **1,611**                                                                                                                           |   | **$** | **25,000** |   |

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**SHELBY      ACQUISITION II, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**April      30, 2008**

**NOTE      1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING      POLICIES**

|   | (a) | Organization                and Business: |
|--------|-----|-------------------------------------------|

|   | (b) | Basis                of Presentation/Going Concern: |
|--------|-----|-----------------------------------------------------|

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**SHELBY      ACQUISITION II, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**April      30, 2008**

**NOTE      1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (Continued):**

|  | (c) | Cash                and Cash Equivalents |
|--|-----|------------------------------------------|

|   | (d) | Use                of Estimates: |
|--------|-----|----------------------------------|

|   | (e) | Income                Taxes |
|--------|-----|-----------------------------|

|   | (f) | Loss                per Common Share |
|--------|-----|--------------------------------------|

|   | (g) | Fair                Value of Financial Instruments |
|--------|-----|----------------------------------------------------|

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**SHELBY        ACQUISITION II, INC.**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO FINANCIAL STATEMENTS**

**April        30, 2008**

**NOTE      2 – CAPITAL STOCK**

**NOTE      3 – DUE TO STOCKHOLDER**

**NOTE      4 – RECENT ACCOUNTING PRONOUNCEMENTS**

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**SHELBY      ACQUISITION II, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**April      30, 2008**

**NOTE      4 – RECENT ACCOUNTING PRONOUNCEMENTS (Continued):**

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**SHELBY      ACQUISITION II, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**April      30, 2008**

**NOTE      4 – RECENT ACCOUNTING PRONOUNCEMENTS (Continued):**

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**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations. **

***Results      of Operations***

***Liquidity      and Capital Resources***

|                                                     |   | Nine MonthsEndedApril 30, 2008 |    | Period fromInception(February 1, 2007) toApril 30, 2007 |   | Cumulative Periodfrom Inception(February 1, 2007) toApril 30, 2008 |   |
|----------------------------------------------------------|--------|-----------------------------------------------|---------|---------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|--------|
| Net                cash used in operating activities     |   | $                                             | (28,972 | )                                                                                     | $      | 0                                                                                                     |   | $ | (42,139 | ) |
| Net                cash used in investing activities     |   | $                                             | 0       |                                                                                  | $      | 0                                                                                                     |   | $ | 0 |   |
| Net                cash provided by financing activities |   | $                                             | 18,158  |                                                                                  | $      | 25,000                                                                                                |   | $ | 43,750 |   |
| Net                effect on cash                        |   | $                                             | (10,814 | )                                                                                     | $      | 25,000                                                                                                |   | $ | 1,611 |   |

***Plan      of Operations***

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|  | (i) | filing                reports under the Securities Exchange Act of 1934, as amended (the                “Exchange Act”), and |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | consummating                an acquisition.  |
|--|------|---------------------------------------------------|

***Off-Balance      Sheet Arrangements***

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**Item      3A(T). Controls and Procedures.**

***Evaluation      of Disclosure Controls and Procedures***

***Changes      in Internal Controls***

**PART      II — OTHER INFORMATION**

**Item      1. Legal Proceedings.**

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

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information.**

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**Item      6. Exhibits.**

| Exhibit                No. |   | Description                                                                                                                                                                                                                                                                                                                                         |
|----------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                                                |
| *3.1                       |   | Certificate                of Incorporation, as filed with the Delaware Secretary of State on                February 1, 2007.                                                                                                                                                                                                                      |
|                       |   |                                                                                                                                                                                                                                                                                                                                                |
| *3.2                       |   | By-Laws.                                                                                                                                                                                                                                                                                                                                            |
|                       |   |                                                                                                                                                                                                                                                                                                                                                |
| 31.1                       |   | Certification                of the Company’s Principal Executive Officer and Principal Financial                Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,                with                respect to the registrant’s Quarterly Report on Form 10-QSB for the                quarter ended April 30, 2008. |
|                       |   |                                                                                                                                                                                                                                                                                                                                                |
| 32.1                       |   | Certification                of the Company’s Principal Executive Officer and Principal Financial                Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to                Section                906 of the Sarbanes Oxley Act of                2002.                                                               |

| * | Filed                as an exhibit to the Company's Registration Statement on Form 10-SB,                as                filed with the Securities and Exchange Commission on November 20,                2007,                and incorporated herein by this                reference. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

| Dated:                June 16, 2008 | **SHELBY                ACQUISITION II, INC.** |
|-------------------------------------|------------------------------------------------|
|                                |                                           |
|                                | By:                                            | /s/                James R. Kerr |
|                                |                                           | James                R. Kerr |
|                                |                                           | President,                Secretary and Director |

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