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**SHELBY      ACQUISITION IV, INC.**

**- **
**INDEX      -**

|                                                       | Page                                                                                                                           |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| **PART                I- FINANCIAL INFORMATION:**          |                                                                                                                           |
|                                                       |                                                                                                                           |
| Item                1.                                     | Financial                Statements                                                                                            |   |
|                                                       |                                                                                                                           |   |
|                                                       | Balance                Sheet as of October 31, 2007 (unaudited)                                                                | F-1 |
|                                                       |                                                                                                                           |   |
|                                                       | Statements                of Operations for the Three Months Ending October 31, 2007                (unaudited)                | F-2 |
|                                                       | and                for the Period from February 1, 2007 (Date of Inception)                through                             |   |
|                                                       | October                31, 2007 (unaudited)                                                                                    |   |
|                                                       |                                                                                                                           |   |
|                                                       | Statement                of Stockholder’s Equity for the Period from February 1, 2007 (Date of                Inception) | F-3 |
|                                                       | through                October 31, 2007 (unaudited)                                                                            |   |
|                                                       |                                                                                                                           |   |
|                                                       | Statements                of Cash Flows for the Three Months Ending October 31, 2007                (unaudited)                | F-4 |
|                                                       | and                for the Period from February 1, 2007 (Date of Inception)                through                             |   |
|                                                       | October                31, 2007 (unaudited)                                                                                    |   |
|                                                       |                                                                                                                           |   |
|                                                       | Notes                to Financial Statements (unaudited)                                                                       | F-5 |
|                                                       |                                                                                                                           |   |
| Item                2.                                     | Management's                Discussion and Analysis of Financial Condition and Results of                Operations            | 1 |
|                                                       |                                                                                                                           |   |
| Item                3.                                     | Controls                and Procedures                                                                                         | 2 |
|                                                       |                                                                                                                           |   |
| **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                                                                                                                       | 3 |
|                                                       |                                                                                                                           |   |
| Signatures                                                 | 4                                                                                                                              |

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**PART      I – FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

**SHELBY      ACQUISITION IV, INC.**

**(A      Development Stage Company)**

**BALANCE      SHEET**

**(Unaudited)**

| **ASSETS**                                                                                                                                      |   |   |       |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|
| **CURRENT                ASSETS**                                                                                                               |   |   |       |   |
| **Cash                and cash equivalents**                                                                                                    |   | $      | 11,797     |   |
|                                                                                                                                            |   |   |       |   |
| **TOTAL                ASSETS**                                                                                                                 |   | **$**  | **11,797** |   |
|                                                                                                                                            |   |   |       |   |
| **LIABILITIES                & STOCKHOLDER'S EQUITY**                                                                                       |   |   |       |   |
| **CURRENT                LIABILITIES**                                                                                                          |   |   |       |   |
| **Accrued                Professional Fees**                                                                                                    |   | $      | 3,675      |   |
|                                                                                                                                            |   |   |       |   |
| **TOTAL                LIABILITIES**                                                                                                            |   |   | 3,675      |   |
|                                                                                                                                            |   |   |       |   |
| **STOCKHOLDER'S                EQUITY**                                                                                                         |   |   |       |   |
| **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**                                                                              |   |   | (16,878    | )      |
| **TOTAL                STOCKHOLDER'S EQUITY**                                                                                                   |   |   | 8,122      |   |
|                                                                                                                                            |   |   |       |   |
| **TOTAL                LIABILITIES & STOCKHOLDER'S EQUITY**                                                                                 |   | **$**  | **11,797** |   |

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**SHELBY      ACQUISITION IV, INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF OPERATIONS**

**(Unaudited)**

|                                                                                                           |   |                           |          | **For                the**             |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------------|----------------------------------------|--------|
|                                                                                                           |   | **For                the**     |          | **Cumulative**                         |   |
|                                                                                                           |   | **Three**                      |          | **Period                from**         |   |
|                                                                                                           |   | **Months**                     |          | **Inception**                          |   |
|                                                                                                           |   | **Ended**                      |          | **(February                1, 2007)**  |   |
|                                                                                                           |   | **October 31, 2007** |          | **to October 31, 2007** |   |
|                                                                                                           |   |                           |          |                                   |   |
| **Revenue**                                                                                                    |   | **$**                          | **-**         |                                   | **$**  | **-** |   |
|                                                                                                           |   |                           |          |                                   |   |   |   |
| **General                and Administrative Expenses**                                                         |   |                           | 3,675         |                                   |   | 16,878 |   |
|                                                                                                           |   |                           |          |                                   |   |   |   |
| **Net                Loss**                                                                                    |   | **$**                          | **(3,675**    | **)**                                  | **$**  | **(16,878** | **)** |
|                                                                                                           |   |                           |          |                                   |   |   |   |
| **Basic                and Diluted Net Loss Per Share**                                                        |   |                           | **0.00**      |                                   |   | **0.00** |   |
|                                                                                                           |   |                           |          |                                   |   |   |   |
| **Number                of Shares Used in Computing Basic and Diluted Net Loss Per                Share** |   |                           | **5,000,000** |                                   |   | **5,000,000** |   |

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**SHELBY      ACQUISITION IV, INC.**

**(A      Development Stage Company)**

**STATEMENT      OF STOCKHOLDER’S EQUITY**

**(Unaudited)**

|                                                         |   |           |                     |        |                     |             |                     | **Deficit**     |                     |              |                     |
|--------------------------------------------------------------|--------|--------------------------|--------------------------|-----------------------|--------------------------|------------------|--------------------------|-----------------|--------------------------|-------------------|--------------------------|
|                                                         |   |                     |                     |                  |                     |             |                     | **Accumulated** |                     |              |                     |
|                                                         |   |                     |                     |                  |                     | **Additional**   |                     | **During**      |                     |              |                     |
|                                                         |   | **Preferred Stock** |                     | **Common Stock** |                     | **Paid In** |                     | **Development** |                     | **Stockholder's** |                     |
|                                                         |   | **Shares**               |      | **Amount**            |      | **Shares**       |      | **Amount**      |      | **Capital**       |      | **Stage** |      | **Equity** |   |
|                                                         |   |                     |                     |                  |                     |             |                     |            |                     |              |                     |   |   |   |   |
| **BALANCE                  AT FEBRUARY 1, 2007 INCEPTION**   |   |                     | —                  |                  | $                        | -                |                     |            | —                  |              | $                        | - |   | $ | - |   | $ | - |   | $ | - |   |
|                                                         |   |                     |                     |                  |                     |             |                     |            |                     |              |                     |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of Common Stock                    |   |                     | —                  |                  |                     | -                |                     |            | 5,000,000                |              |                     | 500 |   |   | 24,500 |   |   | — |   |   | 25,000 |   |
|                                                         |   |                     |                     |                  |                     |             |                     |            |                     |              |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                    |   |                     | —                  |                  |                     | -                |                     |            | —                  |              |                     | — |   |   | — |   |   | (13,203 | ) |   | (13,203 | ) |
|                                                         |   |                     |                     |                  |                     |             |                     |            |                     |              |                     |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  as of July 31, 2007**             |   |                     | **—**              |                  |                     | **-**            |                     |            | **5,000,000**            |              |                     | **500** |   |   | **24,500** |   |   | **(13,203** | **)** |   | **11,797** |   |
|                                                         |   |                     |                     |                  |                     |             |                     |            |                     |              |                     |   |   |   |   |   |   |   |   |   |   |   |
| 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** |   | **$** | **24,500** |   | **$**  | **(16,878** | **)** | **$** | **8,122** |   |

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**SHELBY      ACQUISITION IV, INC.**

**(A      Development Stage Company)**

**STATEMENTS      OF CASH FLOWS**

**(Unaudited)**

|                                                                                                        |   |                           |       | **For the**                       |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|----------------------------------------|--------|
|                                                                                                        |   |                           |       | **Cumulative **                   |   |
|                                                                                                        |   | **For the**               |       | **Period from**                   |   |
|                                                                                                        |   | **Three Months**          |       | **Inception**                          |   |
|                                                                                                        |   | **Ended **                |       | **(February 1, 2007)**       |   |
|                                                                                                        |   | **October 31, 2007** |       | **to October 31, 2007** |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES**                                                   |   |                           |       |                                   |   |   |   |
| **Net                  Loss**                                                                               |   | $                              | (3,675     | )        | $      | (16,878 | ) |
| **Adjustments                  to reconcile Net Loss to net cash provided by                  operations:** |   |                           |       |                                   |   |   |   |
| **Accrued                  professional fees**                                                              |   |                           | 3,675      |                                   |   | 3,675 |   |
| **Due                  from Affiliates**                                                                    |   |                           | (1,783     | )                                      |   | 0 |   |
| **Net                  cash used in Operating Activities**                                                  |   |                           | (1,783     | )                                      |   | (13,203 | ) |
|                                                                                                        |   |                           |       |                                   |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES**                                                   |   |                           |       |                                   |   |   |   |
| **Proceeds                  from Issuance of Common Stock**                                                 |   |                           | 0          |                                   |   | 25,000 |   |
| **Net                  cash provided by Financing Activities**                                              |   |                           | 0          |                                   |   | 25,000 |   |
|                                                                                                        |   |                           |       |                                   |   |   |   |
| **Net                  (decrease) increase in cash and cash equivalents for                  period**       |   |                           | (1,783     | )                                      |   | 11,797 |   |
|                                                                                                        |   |                           |       |                                   |   |   |   |
| **Cash                  and cash equivalents at beginning of period**                                       |   |                           | 10,014     |                                   |   | — |   |
|                                                                                                        |   |                           |       |                                   |   |   |   |
| **Cash                  and cash equivalents at end of period**                                             |   | **$**                          | **11,797** |                                   | **$**  | **11,797** |   |

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**SHELBY      ACQUISITION IV, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**October      31, 2007**

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

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

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**SHELBY      ACQUISITION IV, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**October      31, 2007**

|  | (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 IV, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**October      31, 2007**

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**SHELBY      ACQUISITION IV, INC.**

**(A      DEVELOPMENT STAGE COMPANY)**

**NOTES      TO FINANCIAL STATEMENTS**

**October      31, 2007**

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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***

** **

| Operating                activities |   | $      | (13,203 | )      |
|-------------------------------------|--------|--------|---------|--------|
| Investing                activities |   |   | -       |   |
| Financing                activities |   | $      | 25,000  |   |
|                                |   |   |    |   |
| Net                effect on cash   |   | $      | 11,797  |   |

***Plan      of Operations***

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

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

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***Off-Balance      Sheet Arrangements***

** **

**Item      3. Controls and Procedures.**

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**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.**

**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 October 31, 2007. |
|             |   |                                                                                                                                                                                                                                                                                                                                                  |
| 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:                March 11, 2008 | **SHELBY                ACQUISITION IV, INC.** |
|--------------------------------------|------------------------------------------------|
|                                 |                                           |
|                                 |                                           |
|                                 | By:                                            | /s/ James R. Kerr |  |  |
|                                 | Name:                James R. Kerr             |
|                                 | Title:                President and Secretary  |

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