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**
UNITED STATES******SECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549**FORM 10-KSB**
(Mark One) x Annual report pursuant toSection 13 or 15(d) of the securities exchange act of 1934 for the fiscal yearended **September 30, 2006**. 
[] Transition report under Section 13 or15(d) of the securities exchange act of 1934 **DELTRON, INC. (Exact name of small business issuer in its charter) **Nevada  **333-130197**86-1147933
(State or other jurisdiction of  
(Commission File Number)  
(IRS Employer Identification No.)  
incorporation or organization)  
  
  **Sabana Oeste, Restaurante Princessa Marina,100 Metros Oeste S.N.B. Abogados, San Jose, Republica de Costa Rica(Address of principal executive offices) 

Issuer's telephone number: 011-506-290-4886 

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

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

Check whether the issuer (1) filed all reports required to befiled by Section 13 or 15(d) of the Exchange Act during the past 12 months (orfor 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.[x] Yes]No 
Check if there is no disclosure of delinquent filers inresponse to Item 405 or Regulation S-B is not contained in this form, and nodisclosure will be contained, to the best of registrant's knowledge, indefinitive proxy or information statements incorporated by reference in Part IIIof this Form 10-KSB or any amendment to this Form 10-KSB x
Indicate by check mark whether the registrant is a shellcompany (Rule 12b-2 of the Exchange Act) xYes[] No
State issuer's revenues for its most recent fiscal year: **$0.00**

State the aggregate market value of the voting and non-votingcommon equity held by non-affiliates computed by reference to the price at whichthe common equity was sold. **$74,900 (3,745,000 common shares @ $0.02 pershare)**
State the number of shares outstanding of each of the issuer'sclasses of common equity, as of the latest practicable date.**As of December01, 2006, the issuer had 5,545,000 shares of common stock issued andoutstanding.**

 

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this annual report on Form 10-KSB contain or maycontain forward-looking statements that are subject to known and unknown risks,uncertainties and other factors which may cause actual results, performance orachievements to be materially different from any future results, performance orachievements expressed or implied by such forward-looking statements. Theseforward-looking statements were based on various factors and were derivedutilizing numerous assumptions and other factors that could cause our actualresults to differ materially from those in the forward-looking statements. Thesefactors include, but are not limited to, our ability to consummate a merger orbusiness combination, economic, political and market conditions andfluctuations, government and industry regulation, interest rate risk, U.S. andglobal competition, and other factors. Most of these factors are difficult topredict accurately and are generally beyond our control. You should consider theareas of risk described in connection with any forward-looking statements thatmay be made herein. Readers are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date of this report.Readers should carefully review this annual report in its entirety, includingbut not limited to our financial statements and the notes thereto. Except forour ongoing obligations to disclose material information under the Federalsecurities laws, we undertake no obligation to release publicly any revisions toany forward-looking statements, to report events or to report the occurrence ofunanticipated events. For any forward-looking statements contained in anydocument, we claim the protection of the safe harbour for forward-lookingstatements contained in the Private Securities Litigation Reform Act of 1995.
**PART I

ITEM 1. DESCRIPTION OF BUSINESS

General Information**
Deltron, Inc. was incorporated in the State of Nevada on September 14, 2005.We were formed as a land development companythat intends to construct rental housing units in CostaRica. In March of 2006, Deltron, Inc purchased a property in San Isidro deHeredia, Costa Rica, which we intend to develop. We raised $74,900 from our mostrecent offering, and with this money we intend to finance the construction oftwo rental units on this property. Deltron's principal place of business andcorporate offices are located at Sabana Oeste, Restuarante Princessa Marina, 100Metros Oeste, San Jose, Republic of Costa Rica, telephone number (011)506-290-4886. The office space is a 3,000 square foot shared-office building inwhich Deltron has rented a 150 square foot office. Our fiscal year end isSeptember 30.
As of September 30, 2006 we had generated no revenues. We have been issued anopinion by our auditor that raises substantial doubt about our ability tocontinue as a going concern based on our current financial position. 

We have a total of 100,000,000 authorized common shares with a par value of$0.001 per share and 5,545,000 common shares issued and outstanding as ofSeptember 30, 2006.

We have completed a form SB-2 Registration Statement under the Securities Actof 1933 with the U.S. Securities and Exchange Commission registering 7,500,000shares (minimum of 3,000,000) of our common stock in connection with an offeringof the 7,500,000 shares at a price of $0.02 per share. As of September 30, 2006,we had partially completed the offering and raised a total of $74,900 on theissuance of the 3,745,000 shares. We closed the offering on September 07, 2006.
**Business Development

Deltron, Inc. was incorporated in the State of Nevada on September 14th,2005, and our fiscal year-end isSeptember 30th. The company's administrative offices are locatedat Sabana Oeste, Restuarante Princessa Marina, 100 Metros Oeste, San Jose,Republic of Costa Rica, the telephone number is (011) 506-290-4886. 
Deltron, Inc. has no revenues and limited operations. We have sustainedlosses since inception, September 14, 2005, to September 30, 2006 of $42,597 andrely solely upon the sale of securities and loans from our corporate officersand directors for funding.

Deltron, Inc. has incorporated Deltron Holdings Corporation S.A. on November17th, 2005 in San Jose, Costa Rica, a company in which Deltron, Inc.owns 100% of the shares. This company was used to purchase the property that wecurrently have available for our development plans. 

Deltron has never declared bankruptcy, been in receivership, or involved inany kind of legal proceeding. Deltron, its directors, officers, affiliates andpromoters have not and do not intend to enter into negotiations or discussionswith representatives or owners of any other businesses or companies regardingthe possibility of an acquisition or merger.
**Principal Products, Services and Their Markets

Deltron is a land development companythat intends to construct rental housing in Costa Rica. Wewill accomplish this goal by developing a total of two (2), three-bedroomapartments. We will construct the apartments on a property that we currently ownin San Isidro de Heredia, Costa Rica. On completion of the construction phase,we will offer these apartments for rent to the public via word of mouth andclassified advertising. 
The property we purchased, and the apartments that we intend to construct,will be owned by Deltron Holding Corporation S.A., a company incorporated in SanJose, Costa Rica, on November 17th 2005, the shares of which are 100%owned by Deltron, Inc.

Upon the closing of our most recent offering on September 9, 2006, we hadraised a total of $74,900 from the sale of 3,745,000 common shares, orapproximately 50% of the offering. In accordance with our prospectus dated June16, 2006, which will enable us to build 2 apartments and rent them to thepublic. 

At this time we are negotiating with Trim Studios S.A., a constructioncontractor in Costa Rica, to contract their services for the construction of twoapartments/housing units, but we have not signed a contract with them to date.We anticipate that construction will take approximately 5 months. As such, weexpect to generate revenues from housing rentals in the last three months ofthis year. 

Our primary focus at this point is to construct a minimum of two (2)three-bedroom apartments with the goal of renting them to middle-income familiesin order to generate revenue. 

The final product will be competitive in both quality and affordability whencompared to similar housing offered by our competitors. However, we intend todistinguish our rental units from the competition by providing features notfound in many Costa Rican rental properties, such as secured entry, hot water,modern fixtures, internet, cable, and telephone access.

Deltron will provide ongoing maintenance of the properties and apartments ona regular basis, and we will make any repairs on an as needed basis, as well asprovide the tenants with twenty-four hour telephone access in case of emergency.
**Competitive Business Conditions and Strategy; Deltron's Position in theIndustry

Deltron intends to establish itself as a competitive company in an alreadyexisting market. Currently, there are many other corporate and private entitiesthat offer rental housing in Costa Rica. Most of these rental properties areoffered for lease by word of mouth or classified advertising. 

The company's founder and President, Mr. Phillips, a direct marketingconsultant, has lived in Costa Rica for three of the past five years, andtogether with Hilda Rivera,a director of the company and Costa Rican land developer, hasfound that there is a high demand among the target market for quality rentalhousing of the kind that Deltron intends to offer, particularly those that haveaccess to modern features such as hot water, internet, cablevision, and arelocated near public transportation, schools and shopping.
Our strategic approach is to offer "middle-class" housing to lowermiddle-income families. Part of this will be achieved by constructing apartmentswith a small frontage area and walkway, as well as a privately enclosed backyard.

The Company also believes that because the housing will be new and containmodern features, it will be more desirable to prospective tenants than many ofthe options offered by our competitors.Manicured garden areas, hot water, cable, internet andtelephone access are not common features found many housing units in Costa Rica,and we contend that this will help to set us apart from the competition.
Important to our business strategy is to find tenant families for each of theapartments consisting of two employed adults with good standing credit historiesand previous rental references. We believe that the kind of rental housing weintend to offer will create high market demand and enable us to be selective infinding tenants whom are able to pay the rent.

The apartments will be promoted and advertised in the classified section oflocal newspapers and by word of mouth. We will also place a large sign on thefront of the property. 

To date, we have not entered into any negotiations with realtors whospecialize in matching landlords with tenants, but this will be an availableoption to Deltron should we decide that it is a necessary or desired means offinding tenants.
**Sales and Distribution Methods**
We will offer the apartments for rent via word of mouth and classifiednewspaper advertisement on terms of renewable one-year lease agreements. We'llalso require a one-month damage deposit from the tenant, which will be refundedat the end of the lease agreement, provided that there is no damage to theapartment other than normal wear and tear, or because of circumstances beyondthe tenant's control.

The tenant will be responsible for paying the electricity, cable, internet,telephone, and water bills directly to the providers.

The rental agreements between Deltron and the tenants will be written andexecuted by a Costa Rican attorney. 
**Sources and Availability of Products**
Construction companies and building materials are plentiful in Costa Rica andthe market places for each of these products and services are highlycompetitive. The success of Deltron's business plan relies heavily on finding ageneral contractor with whom we can negotiate to construct the apartments onschedule and within budget. Deltron, Inc has entered into preliminarynegotiations with a construction company, Trim Studios S.A., to assist us withconstruction, but at this time no formal agreements with Trim Studios have beenfinalized and no contract for their services has been signed.
**Dependence on one or a few major customers

Deltron's business plan is dependent upon finding tenants who will rent ourapartments and make the monthly payments. As such, we intend to rent each of theapartments to families that consist of at least two working adults with credithistories and references which we can verify are in good standing.

Housing is a major need and commitment for a family, and we do not anticipatemuch difficulty in collecting the monthly payments from the tenants.
**Patents and Trademarks**
There are no aspects of our business plan which require a patent, trademark,or product license. We have not entered into any vendor agreements or contractsthat give or could give rise to any obligations or concessions.
**Government and Industry Regulation**
In Costa Rica, there are numerous government controls in place with referenceto housing construction, all of which revolve around the specifications of thearchitectural plans.

In order to proceed with the construction phase of our business plan, we arerequired by law to submit the architectural plans for our project to themunicipality for approval before being granted a construction permit. The plansmust be approved by a licensed architect or civil engineer who is a member ofthe College of Engineers and Architects of Costa Rica.

A complete set of plans includes a design plan, site plan, distribution plan,elevation and transversal and longitude perspectives, roof design and drainage,design of footings and support beams, structural plans, electrical design,mechanical and sanitary system design, as well as a plan that details theconstruction's interior finish.

We have hired the services of Tropical Design Group S.A., an architecturalfirm, who has completed the design and aforementioned plans for two rental unitsto be built on the site owned by Deltron, and currently those plans are beforethe City of San Isidro de Heredia for approval and issuance of the constructionpermits. 
**Research and Development Activities and Costs

Deltron has spent no time in the last two fiscal years on specializedresearch and development activities, and has no plans to undertake any researchor development in the future.
**Compliance with Environmental Laws 

There are no special environmental laws for building apartments on a propertyin Costa Rica which is zoned for residential housing.

Once we have determined that we have sufficient funding to proceed with ourbusiness plan, we will begin to look for an additional property to purchase. Wewill only purchase a property in a neighborhood that is zoned for residentialhousing. 

 
**Subcontractors**
We intend to use the services of Trim Studios S.A. who will supervise thesubcontractors for labour and property construction. However, at this time weare only in preliminary negotiations with Trim Studios S.A., and we have notformally committed to hiring them.
**Employees and Employment Agreements

At present, we have no full-time employees. Our three officers and directorsare part-time employees and each will devote up to approximately 20 hours perweek of their time to our operation. Our officers and directors do not haveemployment agreements with us. We presently do not have pension, health,annuity, insurance, stock options, profit sharing or similar benefit plans;however, we may adopt plans in the future. There are presently no personalbenefits available to our officers and directors. Our officers and directorswill handle our administrative duties. Because our officers and directors areinexperienced with construction, they will hire a qualified person for the,development of the property who will also supervise the hiring of the labour forthe construction.
**Reports to Security Holders**
Deltron will voluntarily make available an annual report including auditedfinancials on Form 10-K or Form 10-KSB to security holders. We will file thenecessary reports with the SEC pursuant to the Exchange Act, including but notlimited to, the report on Form 8-K, annual reports on Form 10-K or 10-KSB, andquarterly reports on Form 10-Q or 10-QSB.

The public may read and copy any materials filed with the SEC at the SEC'sPublic Reference Room at 100 F Street NE, Washington, DC 20549. The public mayobtain information on the operation of the Public Reference Room by calling theSEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,proxy and information statements, and other electronic information regardingDeltron and filed with the SEC at http://www.sec.gov.
**Risks associated with DELTRON, INC.*****We are a start-up company with a lack of operating history and profitability.Deltron has incurred losses since inception and we expect those losses tocontinue in the future. As a result, we may have to suspend or cease operations.***
We were incorporated on September 14th, 2005,and we have not started our proposed business operationsor realized any revenues. We have no operating history upon which an evaluationof our future success or failure can be made. As a result, it is possible thatwe may not generate revenues in the future. We have incurred a net loss of$42,597 since inception to September 30, 2006, and in order to generate revenuewe are dependent on:Our ability to finance and      construct our rental unitsOur ability to find tenants who      will rent the apartments in order to generate revenues
Based upon current plans, we expect to incur operating losses in futureperiods. This will happen because the maximum possible revenues we can generatefrom the business will not be sufficient enough to cover the expenses associatedwith operating the company. As such, we may not be able to generate enoughfuture revenues to cover our expenses, which could cause us to suspend or ceaseoperations.
***Because Deltron is a small company, and does not have much capital, if we areunable to raise additional funds to meet our needs we may have to scale backoperations which could result in a loss of your investment.***
Because we are a small company with limited financial resources, we arelimited in our ability to successfully implement our business plan, and we maynot be able to build and rent as many apartments as we would like. In that case,we would have to raise more capital in order for the business to be successful.

If we cannot build and rent enough apartments, then we would be unable togenerate the revenues required in order to maintain our business and this couldresult in a loss of your investment.
***Because Mr. Phillips has other outside business activities, he will only beable to dedicate a limited amount of his time to Deltron's operations. Thiscould result in periodic interruptions or suspensions of the business plan.***
Because our company president Mr. Phillipshas other outside business interests, he will only be ableto devote a limited amount of his time to our operations. Deltron operations mayoccur at times which are inconvenient to Mr. Phillips, which could result in thedevelopment of our plan being periodically interrupted or suspended. ***Because Deltron's Operations and Assets are concentrated in Costa Rica andnot in the United States, we are subject to the risks associated with currencyfluctuations.***
Deltron will be subject to fluctuations in the exchange rates between theU.S. dollar and the Costa Rican colone. The funds being raised for thisprospectus are in U.S. dollars and will be placed in a U.S. dollar account.However, any fluctuation in currency value between the U.S. dollar and CostaRican colone could cause an increase in overall expenses that would exceed theachievable revenues. If that were the case, Deltron would have to cease orsuspend operations.
***If our officers and directors resign or die without having foundreplacements, our operations will be suspended or cease altogether. Should thatoccur, you could lose your investment.***
We have 2officers and 3directors and we are entirely dependant upon them in order to conduct ouroperations. If they should resign or die, there will be no one to run Deltron,and the company has no Key Man insurance. If such an event were to take placeand we were unable to find other persons to run us, our operations would besuspended or cease entirely, and this would result in the loss of yourinvestment. ***Our business plan requires us to hire an independent contractor to build theapartments. If we hire a contractor who fails to build the apartments onschedule, within budget, or within the government building code, we may have tocease operations and you could lose your investment.***
Because no one on our management is trained in construction, we will have tohire a general contractor to build the apartments. Unlike the United States,there is very little regulation governing construction companies or generalcontractors in Costa Rica, and no qualifications are required in order to own oroperate a construction business. So, it is vital that we hire an experiencedconstruction company with a proven track record.

Also, Costa Rica is a country where construction problems are rampant. Theindustry is notorious for its inability to complete projects on schedule,budget, or in compliance with the required government building codes. 

Furthermore, it can take many years in Costa Rica to resolve any dispute inthe courts. So, should we desire to sue the construction company because theydid not meet their contractual agreements and/or obligations, we may have tocease operations and you could lose your investment.
***Our shares are defined as "penny stock", the rules imposed on the sale of theshares may affect your ability to resell any shares, if at all.***
Our shares are defined as a penny stock under the Securities and Exchange Actof 1934, and rules of the Commission. The Exchange Act and such penny stockrules generally impose additional sales practice and disclosure requirements onbroker-dealers who sell our securities to persons other than certain accreditedinvestors who are, generally, institutions with assets in excess of $5,000,000or individuals with net worth in excess of $1,000,000 or annual income exceeding$200,000, or $300,000 jointly with spouse, or in transactions not recommended bythe broker-dealer. For transactions covered by the penny stock rules, abroker-dealer must make a suitability determination for each purchaser andreceive the purchaser's written agreement prior to the sale. In addition, thebroker-dealer must make certain mandated disclosures in penny stocktransactions, including the actual sale or purchase price and actual bid andoffer quotations, the compensation to be received by the broker-dealer andcertain associated persons, and deliver certain disclosures required by theCommission. Consequently, the penny stock rules may affect the ability ofbroker-dealers to make a market in or trade our common stock and may also affectyour ability to resell any shares you may purchase in the public markets.
***Because there is no public trading market for our common stock, you may notbe able to resell or liquidate your investment.***
There is currently no public trading market for our common stock. There is nocentral place, stock exchange, or electronic trading system that would enableyou to resell your shares. 

We have contacted a market maker to file an application on our behalf to haveour common stock listed for quotation on the Over-the-Counter Bulletin Board (OTCBB).The OTCBB is a regulated quotation service that displays real-time quotes, lastsale prices and volume information in over-the-counter (OTC) securities. TheOTCBB is not an issuer listing service, market or exchange. Although the OTCBBdoes not have any listing requirements per se, to be eligible for quotation onthe OTCBB, issuers must remain current in their filings with the SEC orapplicable regulatory authority. Market Makers are not permitted to beginquotation of a security whose issuer does not meet this filing requirement.Securities already quoted on the OTCBB that become delinquent in their requiredfilings will be removed following a 30 or 60 day grace period if they do notmake their required filing during that time. We cannot guarantee that ourapplication will be accepted or approved and our stock listed and quoted forsale. We have been dealing with Spartan Securities Group, Ltd., in St.Petersburg Florida, to obtain eligibility for quotation on the OTCBB. As ofDecember 1, 2006, the NASD is still reviewing our file and no decision has beenmade.

If no market is ever developed for our common stock, it will be difficult foryou to sell any shares you purchase. In such a case, you may find that you areunable to achieve any benefit from your investment or liquidate your shareswithout considerable delay, if at all. In addition, if we fail to have ourcommon stock quoted on a public trading market, the common stock will not have aquantifiable value and it may be difficult, if not impossible, to ever resellyour shares, resulting in an inability to realize any value from yourinvestment.
***We will incur ongoing costs and expenses for SEC reporting and compliance,without revenue we may not be able to remain in compliance, making it difficultfor investors to sell their shares, if at all.***
We have contacted a market maker, Spartan Securities Group, Ltd., to have ourcommon shares quoted on the OTC Electronic Bulletin Board. To be eligible forquotation on the OTCBB, issuers must remain current in their filings with theSEC. Market Makers are not permitted to begin quotation of a security whoseissuer does not meet this filing requirement. Securities already quoted on theOTCBB that become delinquent in their required filings will be removed followinga 30 or 60 day grace period if they do not make their required filing duringthat time. In order for us to remain in compliance we will require futurerevenues to cover the cost of these filings, which could comprise a substantialportion of our available cash resources. If we are unable to generate sufficientrevenues to remain in compliance it may be difficult for you to resell anyshares you may purchase, if at all.
**ITEM 2. DESCRIPTION OF PROPERTY**
Deltron's principal place of business and corporate offices is located atSabana Oeste, Restuarante Princessa Marina, 100 Metros Oeste, San Jose, Republicof Costa Rica, the telephone number is (011) 506-290-4886. The office space is a3,000 square foot shared-office building in which Deltron rents a 150 squarefoot office from S.N.B. Abogados, the landlord. We have no intention of findinganother office space to rent during the development stage of the company andwill operate from these premises at a rate of $200 USD a month. The terms of therental agreement are month to month, and are cancelable at any time with 30 dayswritten notice.

Deltron currently owns a 592 square meter lot in San Isidro de Heredia, CostaRica. This property was purchased for $40,657.00 on March 29, 2006, from anun-affiliated third party, through our wholly-owned subsidiary Deltron HoldingCorporation S.A. The funds to purchase the property were loaned to DeltronHoldings by Shawn Phillips, our president. The balance is non-interest bearingand there are no specific terms of repayment. When we have sufficient revenue tomaintain operations, being generated from the rental of the proposed housingunits, the Board of Directors will at that time address terms of repayment toMr. Phillips.  This is not expected to occur within the first year ofoperations. In the event our business plan fails and we are forced to sell theproperty, the loan would be repaid from the proceeds of the sale.
**Investment Policies**
The Company plans to invest in certain real estate properties in Costa Rica,pursuant to its business plan, for the building and subsequent renting ofapartments in Costa Rica. The Company does not have any limitations on thepercentage of assets it may invest in real estate holdings. Acquisition of realestate will be done primarily for the purpose of generating income for theCompany. The Company will primarily seek undeveloped acreage in Costa Rica onwhich to build the apartments. There are no limitations on the number ofmortgages the Company may have on any given piece of real estate. 
**ITEM 3. LEGAL PROCEEDINGS**
We are not currently involved in any legal proceedings nor do we have anyknowledge of any threatened litigation. 
**ITEM 4. SUMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS**
No matters were submitted to a vote of security holdersduring the fiscal year ended September 30, 2006. 

 
**PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERMATTERS**
No public market currently exists for shares of our common stock. We arecurrently working with Spartan Securities Group, Ltd., in St. PetersburgFlorida, who has filed an 15c2-11on our behalf, with the NASD, to have ourcommon stock listed for quotation on the Over-the-Counter Bulletin Board. As ofDecember 1, 2006 our 15c2-11 was still being reviewed by the NASD.

Of the 5,545,000 shares of common stock outstanding as of December 1, 2006,1,800,000 shares were owned by Mmes. Rivera Mora and Proenza Sanfiel and Mr.Porras and may only be resold in compliance with Rule 144 of the Securities Actof 1933. 

At December 1, 2006, there were 39 shareholders of record. 
**Status of our public offering**
On June 16, 2006, our Form SB-2 registration statement (SEC file no.333-130197) was declared effective by the SEC. From July, 2006 toSeptember 2006, we partially completed our public offering by selling 3,745,000shares of common stock to 36 persons in consideration of $74,900. We closed ouroffering on September 9th, 2006.

Since completing our public offering, until September 30, 2006, we have usedthe proceeds as follows: 
Architectural Plans Costs and    Permits
$
7,860Property Tax, Insurance, &
    Maintenance Costs 
$
0Professional Fees
$
5,650Promotional Materials &    Advertising
$
0Office and Miscellaneous    Expenses
$
60Cash on Hand 
$
61,330   **Totals****$**74,900** 

Holders**
As of September 30, 2006, we have 5,545,000 Shares of $0.001 par value commonstock issued and outstanding held by 39 shareholders of record. 

The stock transfer agent for our securities is Holladay Stock Transfer, 2939N. 67th Place, Scottsdale, Arizona 85251, telephone (480) 481-3940. 
**Dividends**
We have never declared or paid any cash dividends on our common stock. Forthe foreseeable future, we intend to retain any earnings to finance thedevelopment and expansion of our business, and we do not anticipate paying anycash dividends on its common stock. Any future determination to pay dividendswill be at the discretion of the Board of Directors and will be dependent uponthen existing conditions, including our financial condition and results ofoperations, capital requirements, contractual restrictions, business prospects,and other factors that the board of directors considers relevant.
**Section Rule 15(g) of the Securities Exchange Act of 1934**
The Company's shares are covered by Section 15(g) of the Securities ExchangeAct of 1934, as amended that imposes additional sales practice requirements onbroker/dealers who sell such securities to persons other than establishedcustomers and accredited investors (generally institutions with assets in excessof $5,000,000 or individuals with net worth in excess of $1,000,000 or annualincome exceeding $200,000 or $300,000 jointly with their spouses). Fortransactions covered by the Rule, the broker/dealer must make a specialsuitability determination for the purchase and have received the purchaser'swritten agreement to the transaction prior to the sale. Consequently, the Rulemay affect the ability of broker/dealers to sell our securities and also mayaffect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements onbroker/dealers who sell penny securities. These rules require a one page summaryof certain essential items. The items include the risk of investing in pennystocks in both public offerings and secondary marketing; terms important to inunderstanding of the function of the penny stock market, such as "bid" and"offer" quotes, a dealers "spread" and broker/dealer compensation; thebroker/dealer compensation, the broker/dealers duties to its customers,including the disclosures required by any other penny stock disclosure rules;the customers rights and remedies in causes of fraud in penny stocktransactions; and, the NASD's toll free telephone number and the central numberof the North American Administrators Association, for information on thedisciplinary history of broker/dealers and their associated persons.
**Securities authorized for issuance under equity compensation plans**
We do not have any equity compensation plans and accordingly we have nosecurities authorized for issuance thereunder.
**Section 16(a)**
Based solely upon a review of Form 3 and 4 furnished by us under Rule16a-3(d) of the Securities Exchange Act of 1934, we are not aware of anyindividual who failed to file a required report on a timely basis required bySection 16(a) of the Securities Exchange Act of 1934.
**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**
We did not purchase any of our shares of common stock or other securitiesduring the year ended September 30, 2006.
**ITEM 6. PLAN OF OPERATION 

Results of Operations

We have generated no revenues since inception and have incurred $42,597 inexpenses through September 30, 2006. 

The following table provides selected financial data about our company forthe year ended September 30, 2006. 
Balance Sheet Data: 
9/30/06 -------------------------
 -------------Cash 
$                      61,331Total assets 
$                    111,908Total liabilities 
$                      48,605Shareholders' equity 
$                      63,303
Cash provided by financing activities for the year ended September 30, 2006was $105,900, $31,000 from the sale of shares to our officers and directors andthe spouse of a director and $74,900 resulting from the sale of our common stockin our current initial public offering to 36 independent investors.
**Plan of Operation

 

Statements contained herein which are not historical facts areforward-looking statements as that term is defined by the Private SecuritiesLitigation Reform Act of 1995. Although the Company believes that theexpectations reflected in such forward-looking statements are reasonable,forward-looking statements are subject to risks and uncertainties that couldcause actual results to differ from those projected. The Company cautionsinvestors that any forward-looking statements made by the Company are notguarantees of future performance and that actual results may differ materiallyfrom those in the forward-looking statements. Such risks and uncertaintiesinclude, without limitation: established competitors who have substantiallygreater financial resources and operating histories, regulatory delays ordenials, ability to compete as a start-up company in a highly competitivemarket, and access to sources of capital.

The following discussion and analysis should be read in conjunction with ourfinancial statements and notes thereto included elsewhere in this Form 10-KSB.Except for the historical information contained herein, the discussion in thisForm 10-KSB contains certain forward-looking statements that involve risks anduncertainties, such as statements of our plans, objectives, expectations andintentions. The cautionary statements made in this Form 10-KSB should be read asbeing applicable to all related forward-looking statements wherever they appearin this Form 10-KSB. The Company's actual results could differ materially fromthose discussed here.

We are a start-up, development stage corporation and have not yet generatedor realized any revenues from our business operations. Our plan is to buildhousing in Costa Rica and market the units for rent to local residents viaclassified newspaper advertising and word of mouth.

Our auditors have issued a going concern opinion. This means that there issubstantial doubt that we can continue as an on-going business for the nexttwelve months unless we obtain additional capital to pay for our expenses. Thisis because we have not generated any revenues and no revenues are anticipateduntil we begin receiving income from rental sales--and there is no assurance wewill ever reach this point. 

Accordingly, we must raise sufficient capital from sources other than fromthe rental sales. Our only other source for cash at this time is investments byothers. We must raise cash to implement our project and stay in business. Weraised $74,900 from our public offering. Under this offering we sold 3,745,000common shares at $0.02 per share to 36 shareholders, thus we have a total of5,545,000 shares issued and outstanding to 39 shareholders (includes the 3directors of the company). As of September 30, 2006, we had cash on hand of$61,331. This probably will not enable us to fund operations for the next twelvemonths, and we will have to rely on additional loans from our directors, asecond public offering, or a private placement of securities.

We have used the above-mentioned funds to start to develop our propertylocated in San Jose, Costa Rica. Our development program is explained as much aspossible in the business section of this 10-KSB. We do not intend to acquire ordispose of any plant or significant equipment during the next twelve months.

Our development target is to construct two rental units on our property inSan Isidro de Heredia within the first nine months of 2007, and we intend tostart generating revenues in the last three months of 2007. Our success dependson being able to finance the construction of the units, which will most likelyrequire additional loans from our directors, or the sale of additionalsecurities, in order to complete. 

We are currently in negotiations with Trim Studios S.A. to supervise thedevelopment and construction of the property. 

As we have raised the required minimum of $60,000, or the sale of 40%of our offering, we have commenced with operations byhiring an architectural firm, Tropical Design Group S.A., to design the rentalunits, and we are currently in negotiations to hire a general contractor, TrimStudios S.A. to begin construction.
As of September 30, 2006, Deltron had $61,331 in cash. 

It was our intention to raise the entire $150,000 as permitted under ouroffering, however, we raised $74,900, prior to closing our offering September 9,2006, and we are implementing our plan by building two housing units on theproperty.

Once we have built the apartments, we will advertise them for rent by way ofclassified newspaper advertising, word of mouth, and a large billboard sign thatwe will erect on the front of the property. We feel that the location of theproperty, combined with classified newspaper advertising and a billboard signplaced on the front of the lot will be an important partto the success of our business development, acting as an effective way tointroduce Deltron and its product to the public. Our advertising will focus onreasonably priced rental housing in a desirable area. Special emphasis will beplaced on the "modern" features that come with each apartment including hotwater, cable access, internet, and telephone access. 
During the first year of operations, our officers and directors will providetheir labor at no charge. We do not anticipate hiring any staff during the next12 months of operation.

The difference between having the ability to sustain our cash flowrequirements over the next twelve months and the need for additional outsidefunding will depend on how fast we can generate rental revenue. 

If we are unable to generate enough rental revenue to stay in business, or ifwe run out of cash to complete the construction of the two apartments, we willhave to find alternative sources for money, like a second public offering, aprivate placement of securities, or loans from our officers or others. Equityfinancing could result in additional dilution to existing shareholders.

If we are unable to meet our needs for cash, then we may be unable tocontinue, develop, or expand our operations.

We have no plans to undertake any product research and development during theterm covered by this prospectus. There are also no plans or expectations toacquire or sell any plant or significant equipment in the first year ofoperations.

The development program for 2006 consisted of purchasing a property for theconstruction of our rental units and hiring an architect to design twoapartments. The architectural designs have been completed and have been approvedby the College of Architects and Engineers of Costa Rica (a requirement beforeplans can be submitted to the city engineering department for approval andissuance of the construction permits) and currently they are in the cityengineering department of San Isidro de Heredia, Costa Rica, for approval toreceive the construction permits. We anticipate receiving the constructionpermits in January 2007. By this time it is our intention to have a formalagreement in place with Trim Studios S.A. to proceed with construction. Providedthat we have received the construction permits and have signed a contract withTrim Studios S.A. in a timely manner, we intend to commence with construction inJanuary 2007.

If we are unable to complete any phase of construction because we do not haveenough money, we will cease operations until we raise more money. If we can notor do not raise more money, we will be forced to cease operations. If we ceaseoperations, we do not know what we will do and we don't have any plans to doanything. 

We do not intend to hire any employees at this time. All of the work on theproperty will be conducted by unaffiliated independent contractors, such as TrimStudios S.A., that will be hired by Deltron Holding Corporation S.A. and/orDeltron, Inc. The independent contractors will be responsible for theconstruction, contracting tradesmen and sub-contractors, as well as the hiringand supervision of the labor required for the construction.
**Limited Operating History; Need for Additional Capital**
There is no historical financial information about us upon which to base anevaluation of our performance. We are a development stage corporation and havenot generated any revenues from operations. We cannot guarantee we will besuccessful in our business operations. Our business is subject to risks inherentin the establishment of a new business enterprise, including limited capitalresources, possible delays in the development of our property, and possible costoverruns due to price and cost increases in services and supplies.

To become profitable and competitive, we will need to complete theconstruction of the apartments and find tenants to rent our units and generaterevenues from rental income. We believe that the funds raised from our publicoffering may not be sufficient enough for us to operate for the next year, andthat it is likely we will need to raise more funds in order to continue ourbusiness.

We have no assurance that future financing will be available to us onacceptable terms. If financing is not available on satisfactory terms, we may beunable to continue, develop or expand our operations. Equity financing couldresult in additional dilution to existing shareholders. 
**Liquidity and Capital Resources**
To meet our need for cash we raised $74,900 from our public offering. Wecannot guarantee that we have raised enough money through the public offering tostay in business. The money we have raised will be applied to the items setforth in the Use of Proceeds section of our Prospectus filed with the SEC and asexplained throughout this 10-KSB. There is a high probability that we will runout of money before the construction of the two rental units we intend to buildis complete. If that is the case, we will attempt to raise additional money byway of loans from officers of the company, and/or sale of additional securities.Additional equity financing would result in additional dilution to our existingshareholders.

We have discussed this matter with our officers and directors and Mr.Phillips has agreed to advance funds as needed. There is no written agreementwith Mr. Phillips to this affect. The agreement is entirely oral. Mr. Phillipshas advanced $42,765 to date. At the present time, we have not made anyarrangements to raise additional cash. If we need additional cash and cannotraise it, we will either have to suspend operations until we do raise the cash,or cease operations entirely. The funds raised in our public offering, togetherwith the loans advanced, may allow the company to operate for up to one year.Other than as described in this paragraph, we have no other financing plans. 

We anticipate beginning construction in January of 2007. From our preliminarydiscussions with Trim Studios S.A., a construction contractor, it is estimatedthat the entire construction time for the two units will take approximately fivemonths. Hence, the earliest we will be able to make the units available for rentto the public will be in June 2007. At this time we will need to advertise ourunits for rent and find tenants. It is estimated that it will take approximatelytwo months to find suitable tenants and generate rental income. As such, we donot anticipate receiving any rental income or revenues sooner than August 2007.

Since inception of the Company on September 14, 2005, to September 30, 2006,the Company has issued 5,545,000 common shares at $0.01 and $0.02 per share fortotal proceeds of $105,900. This was accounted for as an acquisition of shares.

We received a $42,765 loan from Mr. Phillips, our President. This amount owedto Mr. Phillips is non-interest bearing, unsecured, and due on demand. 

As of the date of this filing, we have yet to begin operations and thereforehave not generated any revenues.

As of September 30, 2006, our total assets were $111,908 and our totalliabilities were $48,605.
**Summary of Significant Accounting Policies

Going Concern and Liquidity Considerations**
The accompanying audited consolidated financial statements have been preparedassuming that the Company will continue as a going concern, which contemplates,among other things, the realization of assets and satisfaction of liabilities inthe normal course of business. For the year ended September 30, 2006, theCompany had a loss from operations of $37,453, an accumulated deficit of $42,597and has earned no revenues since inception. The Company intends to fundoperations through equity financing arrangements, which may be insufficient tofund its capital expenditures, working capital and other cash requirements forthe year ending September 30, 2007.

The ability of the Company to emerge from the developmentstage is dependent upon, among other things, obtaining additional financing tocontinue operations, and development of its business plan.

In response to these problems, management intends to raiseadditional funds through public or private placement offerings.

These factors, among others, raise substantial doubt aboutthe Company's ability to continue as a going concern. The accompanying auditedconsolidated financial statements do not include any adjustments that mightresult from the outcome of this uncertainty.
**Basis of Consolidation**
These consolidated financial statements include the accounts of the Companyand its wholly owned subsidiary, Deltron Holdings Corporation S.A. Allintercompany balances and transactions have been eliminated.
**Basis of Presentation**
The accounting and reporting policies of the Company conform to U.S.generally accepted accounting principles applicable to development stagecompanies. 
**Use of Estimates**
The preparation of financial statements in conformity with United Statesgenerally accepted accounting principles requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amount of revenues and expenses during the reportingperiod. Actual results could differ from those estimates. The Company's periodicfilings with the Securities and Exchange Commission include, where applicable,disclosures of estimates, assumptions, uncertainties and markets that couldaffect the financial statements and future operations of the Company.
**Cash and Cash Equivalents**
Cash and cash equivalents include cash in banks, money marketfunds, and certificates of term deposits with maturities of less than threemonths from date of purchase, which are readily convertible to known amounts ofcash and which, in the opinion of management, are subject to an insignificantrisk of loss in value.
**Asset Retirement Obligations**
The Company has adopted Statement of Financial Accounting Standards ("SFAS")No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requiresentities to record the fair value of a liability for an asset retirementobligation in the period in which it is a cost by increasing the carrying amountof the related long-lived asset.

Over time, the liability is accreted to its present value, and thecapitalized cost is depreciated over the useful life of the related obligationfor its recorded amount or incurs a gain or loss upon settlement.
**Fair Value of Financial Instruments and Derivative FinancialInstruments**
The Company has adopted Statement of Financial AccountingStandards ("SFAS") Number 119, "Disclosure About Derivative FinancialInstruments and Fair Value of Financial Instruments." The carrying amounts ofcash and cash equivalents, accounts payable and amount due to related partyapproximate their fair values because of the short maturity of these items.Certain fair value estimates may be subject to and involve, uncertainties andmatters of significant judgment, and, therefore, cannot be determined withprecision. Changes in assumptions could significantly affect these estimates.The Company does not hold or issue financial instruments for trading purposes,nor does it utilize derivative instruments in the management of its foreignexchange, commodity price or interest rate market risks.
**Segment Reporting**
SFAS Number 131, "Disclosure About Segments of an Enterprise and RelatedInformation", changed the way public companies report information about segmentsof their business in their quarterly reports issued to shareholders. It alsorequires entity-wide disclosures about the products and services an entityprovides, the material countries in which it holds assets and reports revenuesand its major customers. The Company presently operates only in Costa Rica.
**Income Taxes**
Deferred income taxes are reported for timing differencesbetween items of income or expense reported in the financial statements andthose reported for income tax purposes in accordance with SFAS Number 109,"Accounting for Income Taxes", which requires the use of the asset/liabilitymethod of accounting for income taxes. Deferred income taxes and tax benefitsare recognized for the future tax consequences attributable to differencesbetween the financial statement carrying amounts of existing assets andliabilities and their respective tax bases, and for tax loss and creditcarryforwards. Deferred tax assets and liabilities are measured using enactedtax rates expected to apply to taxable income in the years in which thosetemporary differences are expected to be recovered or settled. The Companyprovides for deferred taxes for the estimated future tax effects attributable totemporary differences and carryforwards when realization is more likely thannot.
**Earnings (Loss) per Share**
The Company has adopted Financial Accounting Standards Board("FASB") Statement Number 128, "Earnings per Share," ("EPS") which requirespresentation of basic and diluted EPS on the face of the income statement forall entities with complex capital structures and requires a reconciliation ofthe numerator and denominator of the basic EPS computation to the numerator anddenominator of the diluted EPS computation. In the accompanying financialstatements, basic loss per common share is computed by dividing net loss by theweighted average number of shares of common stock outstanding during the period.
**Risks and Uncertainties**
The Company operates in the real estate development andproperty rental industry that is subject to significant risks and uncertainties,including financial, operational, technological and other risks associated withoperating a real estate development and property rental business, including thepotential risk of business failure.
**Comprehensive Income (Loss)**
SFAS No. 130, "Reporting Comprehensive Income", establishesstandards for reporting and display of comprehensive income and its componentsin a full set of general-purpose financial statements. For the periods endedSeptember 30, 2006 and 2005, the Company had no items of other comprehensiveincome. Therefore, net loss equals comprehensive loss for the periods endedSeptember 30, 2006 and 2005.
**Foreign Currency Translations**
The Company's functional currency is the Costa Rican Colone. The Company'sreporting currency is the U.S. dollar. All transactions initiated in Costa RicanColones are translated into U.S. dollars in accordance with SFAS No. 52 "ForeignCurrency Translation" as follows:

Monetary assets and liabilities at the rate of exchange ineffect at the balance sheet date;

Equity at historical rates; and

Revenue and expense items at the average rate of exchangeprevailing during the period.

Adjustments arising from such translations are deferred until realization andare included as a separate component of stockholders' equity (deficiency) as acomponent of comprehensive income or loss. Therefore, translation adjustmentsare not included in determining net income (loss) but reported as othercomprehensive income (loss).

For foreign currency transactions, the Company translates these amounts tothe Company's functional currency at the exchange rate effective on the invoicedate. If the exchange rate changes between the time of purchase and the timeactual payment is made, a foreign exchange transaction gain or loss resultswhich is included in determining net income (loss) for the period.
**Stock-Based Compensation**
Effective January 1, 2006, the Company adopted the provisions of Statement ofFinancial Accounting Standards ("SFAS") No. 123(R), *"Share-Based Payment"*,which establishes accounting for equity instruments exchanged for employeeservices. Under the provisions of SFAS 123(R), stock-based compensation cost ismeasured at the grant date, based on the calculated fair value of the award, andis recognized as an expense over the employees' requisite service period(generally the vesting period of the equity grant). Before January 1, 2006, theCompany accounted for stock-based compensation to employees in accordance withAccounting Principles Board Opinion No. 25, *"Accounting for Stock Issued toEmployees,"* and complied with the disclosure requirements of SFAS No. 123,*"Accounting for Stock-Based Compensation"*.  The Company adopted FAS123(R) using the modified prospective method, which requires the Company torecord compensation expense over the vesting period for all awards granted afterthe date of adoption, and for the unvested portion of previously granted awardsthat remain outstanding at the date of adoption. Accordingly, financialstatements for the periods prior to January 1, 2006 have not been restated toreflect the fair value method of expensing share-based compensation. Adoption ofSFAS No. 123(R) does not change the way the Company accounts for share-basedpayments to non-employees, with guidance provided by SFAS 123 (as originallyissued) and Emerging Issues Task Force Issue No. 96-18, *"Accounting forEquity Instruments That Are Issued to Other Than Employees for Acquiring, or inConjunction with Selling, Goods or Services"*. For the periods endedSeptember 30, 2006 and 2005, the Company did not have any stock-basedcompensation.
**Off-Balance Sheet Arrangements**
We do not have any off-balance sheet arrangements that have or are reasonablylikely to have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.
**Recent Accounting Pronouncements**
Recent accounting pronouncements that are listed below did and/or are notcurrently expected to have a material effect on the Company's financialstatements.
**FASB Statements:**
In December 2004, the FASB issued Financial AccountingStandards No 123 (revised 2004) (SFAS 123R), *"Share-Based Payment."* SFAS123R replaces SFAS No. 123*, "Accounting for Stock-Based Compensation,"*and supersedes APB Opinion No. 25, *"Accounting for Stock Issued to Employees*."SFAS 123R requires compensation expense, measured as the fair value at the grantdate, related to share-based payment transactions to be recognized in thefinancial statements over the period that an employee provides service inexchange for the award. SFAS 123R is effective in fiscal periods that beginafter December 15, 2005. 

In December 2004, FASB issued Financial Accounting StandardsNo. 153, *"Exchanges of Non-monetary Assets, an amendment of APB Opinion No.29, Accounting for Non-Monetary Transactions (SFAS 153)."* This statementamends APB Opinion 29 to eliminate the exception for non-monetary exchanges ofsimilar productive assets and replaces it with a general exception for exchangesof non-monetary assets that do not have commercial substance. Under SFAS 153, ifa non-monetary exchange of similar productive assets meets acommercial-substance criterion and fair value is determinable, the transactionmust be accounted for at fair value resulting in recognition of any gain orloss. SFAS 153 is effective in fiscal periods that begin after June 15, 2005.

In May 2005, the FASB issued SFAS No. 154, *"AccountingChanges and Error Corrections, a replacement of APB Opinion No. 20 and FASBStatement No. 3."* This statement changes the requirements for the accountingfor and reporting of a change in accounting principle. Previously, Opinion 20required that most voluntary changes in accounting principle be recognized byincluding in net income of the period of change the cumulative effect ofchanging to a new principle. This statement requires retrospective applicationto prior periods' financial statements of changes in accounting principle, whenpracticable. 

In February 2006, FASB issued Financial Accounting StandardsNo. 155, "Accounting for Certain Hybrid Financial Instruments - an amendment ofFASB Statements No. 133 and 140. This Statement amends FASB Statements No. 133,*Accounting for Derivative Instruments and Hedging Activities,* and No.140, *Accounting for Transfers and Servicing of Financial Assets andExtinguishments of Liabilities.* This Statement resolves issues addressed inStatement 133 Implementation Issue No. D1, *"Application of Statement 133 toBeneficial Interests in Securitized Financial Assets."* SFAS 155 is effectivefor all financial instruments acquired or issued after the beginning of anentity's first fiscal year that begins after September 15, 2006.

In March 2006, FASB issued Financial Accounting Standards No.156, "Accounting for Servicing of Financial Assets - an amendment of FASBStatement No. 140." This Statement amends FASB Statement No. 140, Accounting forTransfers and Servicing of Financial Assets and Extinguishments of Liabilities,with respect to the accounting for separately recognized servicing assets andservicing liabilities. SFAS 156 is effective in the first fiscal year thatbegins after September 15, 2006.

In September 2006, FASB issued Financial Accounting StandardsNo. 157, "Fair Value Measurements." This Statement defines fair value,establishes a framework for measuring fair value in generally acceptedaccounting principles (GAAP), and expands disclosures about fair valuemeasurements. This Statement applies under other accounting pronouncements thatrequire or permit fair value measurements, the Board having previously concludedin those accounting pronouncements that fair value is the relevant measurementattribute. Accordingly, this Statement does not require any new fair valuemeasurements. However, for some entities, the application of this Statement willchange current practice. SFAS 157 is effective in the first fiscal year thatbegins after November 15, 2007.

In September 2006, FASB issued Financial Accounting StandardsNo. 158*, "Employers' Accounting for Defined Benefit Pension and OtherPostretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and132(R)."* This Statement improves financial reporting by requiring anemployer to recognize the overfunded or underfunded status of a defined benefitpostretirement plan (other than a multiemployer plan) as an asset or liabilityin its statement of financial position and to recognize changes in that fundedstatus in the year in which the changes occur through comprehensive income of abusiness entity or changes in unrestricted net assets of a not-for-profitorganization. This Statement also improves financial reporting by requiring anemployer to measure the funded status of a plan as of the date of its year-endstatement of financial position, with limited exceptions. SFAS 158 is effective.An employer with publicly traded equity securities is required to initiallyrecognize the funded status of a defined benefit postretirement plan and toprovide the required disclosures as of the end of the first fiscal year endingafter December 15, 2006.
**ITEM 7. FINANCIAL STATEMENTS**
 
** 

 

 

 

 

 

 

 

 

 

 

 

 

DELTRON, INC.
*(A Development StageCompany)

 *
CONSOLIDATED

FINANCIAL STATEMENTS

 

SEPTEMBER 30, 2006 and2005

 

 

 

 

 

 

 **
 

 
**MOORE & ASSOCIATES, CHARTERED***ACCOUNTANTS ANDADVISORS
PCAOB REGISTERED

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board ofDirectors

Deltron Inc. (ADevelopment Stage Company)

Las Vegas, Nevada

We have audited the accompanying balance sheet of DeltronInc. (A Development Stage Company) as of September 30, 2006 and 2005, and therelated statements of operations, stockholders' equity and cash flows frominception September 14, 2005, through September 30, 2006, and the periods thenended. These financial statements are the responsibility of the Company'smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits. 

We conducted our audits in accordance with standards of thePublic Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audits to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as wellas evaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to abovepresent fairly, in all material respects, the financial position of Deltron Inc(A Development Stage Company) as of September 30, 2006 and 2005 and the resultsof its operations and its cash flows from inception September 14, 2005, throughSeptember 30, 2006 and the periods then ended, in conformity with accountingprinciples generally accepted in the United States of America.

The accompanying financial statements have been preparedassuming that the Company will continue as a going concern. As discussed in Note1 to the financial statements, the Company's net losses of $37,453 andaccumulated deficit of $42,597 as of September 30, 2006 raises substantial doubtabout its ability to continue as a going concern. Management's plans concerningthese matters are also described in Note 1. The financial statements do notinclude any adjustments that might result from the outcome of this uncertainty.

 
***/s/ Moore &Associates, Chartered***
 

Moore & AssociatesChartered

Las Vegas, Nevada

December 19, 2006
* 

2675 S. Jones Blvd.Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702) 253-7501

 ***Deltron, Inc.

(A Development StageCompany)

Consolidated BalanceSheets**
- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Deltron,Inc.

(ADevelopment Stage Company)

ConsolidatedStatements of Operations**
- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Deltron, Inc.

(A Development StageCompany)

Consolidated Statementof Stockholders' Equity (Deficiency)**
- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Deltron, Inc.

(A Development StageCompany)

ConsolidatedStatements of Cash Flows**
- The Accompanying Notes Are An Integral Part Of TheseFinancial Statements -
**Deltron, Inc.***(A Development    Stage Company)
Notes to Consolidated Financial    Statements
September 30, 2006 and 2005   
 
**1. Organization**
Deltron, Inc. (the "Company") is a Nevada corporation  incorporated on September 14, 2005. It is based in San Jose, Costa Rica.  During the year ended September 30, 2006 the Company incorporated a wholly  owned subsidiary, Deltron Holdings Corporation S.A., in San Jose, Costa Rica.  The Company was incorporated on November 17, 2005.

The Company is a development stage company that intends to  engage principally in the acquisition and development of rental housing  properties in the district of San Jose, Costa Rica. To date, the Company's  activities have been limited to its formation, the raising of equity capital  and the acquisition of property *(Note 4)*. 
**Going Concern and Liquidity Considerations**
The accompanying audited consolidated financial statements have been  prepared assuming that the Company will continue as a going concern, which  contemplates, among other things, the realization of assets and satisfaction  of liabilities in the normal course of business. For the year ended September  30, 2006, the Company had a loss from operations of $37,453, an accumulated  deficit of $42,597 and has earned no revenues since inception. The Company  intends to fund operations through equity financing arrangements, which may be  insufficient to fund its capital expenditures, working capital and other cash  requirements for the year ending September 30, 2007.

The ability of the Company to emerge from the development  stage is dependent upon, among other things, obtaining additional financing to  continue operations, and development of its business plan.

In response to these problems, management intends to raise  additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about  the Company's ability to continue as a going concern. The accompanying audited  consolidated financial statements do not include any adjustments that might  result from the outcome of this uncertainty.
 **2. Significant Accounting Policies**
a) **Basis of Consolidation
The consolidated financial statements presented are those of the Company  and its wholly-owned subsidiary, Deltron Holdings Corporation S.A. All  intercompany balances and transactions have been eliminated.

b) **Basis of Presentation**
The accounting and reporting policies of the Company conform to U.S.  generally accepted accounting principles (US GAAP) applicable to development  stage companies. 

 
****** 

Deltron, Inc.***(A Development Stage Company)

Notes    to Consolidated Financial Statements

    September 30, 2006 and 2005

 
 **2. Significant Accounting Policies *- Continued*
c) **Use of Estimates
The preparation of financial statements in conformity with United States  generally accepted accounting principles requires management to make estimates  and assumptions that affect the reported amounts of assets and liabilities and  disclosure of contingent assets and liabilities at the date of the financial  statements and the reported amount of revenues and expenses during the  reporting period. Actual results could differ from those estimates. The  Company's periodic filings with the Securities and Exchange Commission  include, where applicable, disclosures of estimates, assumptions,  uncertainties and markets that could affect the financial statements and  future operations of the Company.

d) **Cash and Cash Equivalents**
Cash and cash equivalents include cash in banks, money    market funds, and certificates of term deposits with maturities of less than    three months from date of purchase, which are readily convertible to known    amounts of cash and which, in the opinion of management, are subject to an    insignificant risk of loss in value.

e) **Asset Retirement Obligations**
The Company has adopted Statement of Financial Accounting Standards ("SFAS")  No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires  entities to record the fair value of a liability for an asset retirement  obligation in the period in which it is a cost by increasing the carrying  amount of the related long-lived asset.

Over time, the liability is accreted to its present value, and the  capitalized cost is depreciated over the useful life of the related obligation  for its recorded amount or incurs a gain or loss upon settlement.

f) **Fair Value of Financial Instruments and Derivative    Financial Instruments**
The Company has adopted Statement of Financial Accounting  Standards ("SFAS") Number 119, "Disclosure About Derivative Financial  Instruments and Fair Value of Financial Instruments." The carrying amounts of  cash and cash equivalents, accounts payable and amount due to related party  approximate their fair values because of the short maturity of these items.  Certain fair value estimates may be subject to and involve, uncertainties and  matters of significant judgment, and, therefore, cannot be determined with  precision. Changes in assumptions could significantly affect these estimates.  The Company does not hold or issue financial instruments for trading purposes,  nor does it utilize derivative instruments in the management of its foreign  exchange, commodity price or interest rate market risks.

g) **Segment Reporting**
SFAS Number 131, "Disclosure About Segments of an  Enterprise and Related Information", changed the way public companies report  information about segments of their business in their quarterly reports issued  to shareholders. It also requires entity-wide disclosures about the products  and services an entity provides, the material countries in which it holds  assets and reports revenues and its major customers. The Company presently  operates only in Costa Rica.

 
**Deltron, Inc.***(A Development Stage Company)
Notes to    Consolidated Financial Statements
September 30,    2006 and 2005** 

2. Significant Accounting Policies *- Continued***h) **Income Taxes**
Deferred income taxes are reported for timing differences    between items of income or expense reported in the financial statements and    those reported for income tax purposes in accordance with SFAS Number 109,    "Accounting for Income Taxes", which requires the use of the asset/liability    method of accounting for income taxes. Deferred income taxes and tax    benefits are recognized for the future tax consequences attributable to    differences between the financial statement carrying amounts of existing    assets and liabilities and their respective tax bases, and for tax loss and    credit carryforwards. Deferred tax assets and liabilities are measured using    enacted tax rates expected to apply to taxable income in the years in which    those temporary differences are expected to be recovered or settled. The    Company provides for deferred taxes for the estimated future tax effects    attributable to temporary differences and carryforwards when realization is    more likely than not.

i) **Earnings (Loss) per Share**
The Company has adopted Financial Accounting Standards    Board ("FASB") Statement Number 128, "Earnings per Share," ("EPS") which    requires presentation of basic and diluted EPS on the face of the income    statement for all entities with complex capital structures and requires a    reconciliation of the numerator and denominator of the basic EPS computation    to the numerator and denominator of the diluted EPS computation. In the    accompanying financial statements, basic loss per common share is computed    by dividing net loss by the weighted average number of shares of common    stock outstanding during the period.

j) **Risks and Uncertainties**
The Company operates in the real estate development and    property rental industry that is subject to significant risks and    uncertainties, including financial, operational, technological and other    risks associated with operating a real estate development and property    rental business, including the potential risk of business failure.

k) **Comprehensive Income (Loss)**
SFAS No. 130, "Reporting Comprehensive Income",    establishes standards for reporting and display of comprehensive income and    its components in a full set of general-purpose financial statements. For    the periods ended September 30, 2006 and 2005, the Company had no items of    other comprehensive income. Therefore, net loss equals comprehensive loss    for the periods ended September 30, 2006 and 2005.
** 

 ****Deltron, Inc.***(A Development Stage Company)Notes to    Consolidated Financial StatementsSeptember 30,    2006 and 2005** 

2. Significant Accounting Policies *- Continued*****
l) **Foreign Currency Translations
The Company's functional currency is the Costa Rican Colone. The Company's  reporting currency is the U.S. dollar. All transactions initiated in Costa  Rican Colones are translated into U.S. dollars in accordance with SFAS No. 52  "Foreign Currency Translation" as follows:

iv)    Monetary assets and liabilities at the rate of exchange      in effect at the balance sheet date;

v)    Equity at historical rates; and

vi)    Revenue and expense items at the average rate of      exchange prevailing during the period.

Adjustments arising from such translations are deferred until realization  and are included as a separate component of stockholders' equity (deficiency)  as a component of comprehensive income or loss. Therefore, translation  adjustments are not included in determining net income (loss) but reported as  other comprehensive income (loss).

For foreign currency transactions, the Company translates these amounts to  the Company's functional currency at the exchange rate effective on the  invoice date. If the exchange rate changes between the time of purchase and  the time actual payment is made, a foreign exchange transaction gain or loss  results which is included in determining net income (loss) for the period.
****
m) **Stock-Based Compensation**
Effective January 1, 2006, the Company adopted the    provisions of Statement of Financial Accounting Standards ("SFAS")    No. 123(R), *"Share-Based Payment"*, which establishes accounting for    equity instruments exchanged for employee services. Under the provisions of    SFAS 123(R), stock-based compensation cost is measured at the grant date,    based on the calculated fair value of the award, and is recognized as an    expense over the employees' requisite service period (generally the vesting    period of the equity grant). Before January 1, 2006, the Company accounted    for stock-based compensation to employees in accordance with Accounting    Principles Board Opinion No. 25, *"Accounting for Stock Issued to    Employees,"* and complied with the disclosure requirements of SFAS    No. 123, *"Accounting for Stock-Based Compensation"*.  The Company    adopted FAS 123(R) using the modified prospective method, which requires the    Company to record compensation expense over the vesting period for all    awards granted after the date of adoption, and for the unvested portion of    previously granted awards that remain outstanding at the date of adoption.    Accordingly, financial statements for the periods prior to January 1, 2006    have not been restated to reflect the fair value method of expensing    share-based compensation. Adoption of SFAS No. 123(R) does not change the    way the Company accounts for share-based payments to non-employees, with    guidance provided by SFAS 123 (as originally issued) and Emerging Issues    Task Force Issue No. 96-18, *"Accounting for Equity Instruments That Are    Issued to Other Than Employees for Acquiring, or in Conjunction with    Selling, Goods or Services"*. For the periods ended September 30, 2006    and 2005, the Company did not have any stock-based compensation.

 
******Deltron, Inc.***(A Development Stage Company)Notes to    Consolidated Financial StatementsSeptember 30,    2006 and 2005** 

3. Capital Stock**
a) **Authorized Stock**
The Company has authorized 100,000,000 common shares with    a par value of $0.001 per share. Each common share entitles the holder to    one vote, in person or proxy, on any matter on which action of the    stockholder of the corporation is sought.

b) **Share Issuances**
From inception of the Company (September 14, 2005) to    September 30, 2005, the Company issued 500,000 common shares at $0.01 per    share for total cash proceeds of $5,000, being $500 for par value shares and    $4,500 for additional paid-in capital, to the spouse of a director and    officer of the Company. 

During the year ended September 30, 2006, the Company    issued 1,300,000 common shares at $0.02 per share for total cash proceeds of    $26,000, being $1,300 for par value shares and $24,700 for additional    paid-in capital. 400,000 shares were sold to an officer and director,    400,000 shares were sold to a director, and 500,000 shares were sold to the    spouse of a director and officer of the Company. The Company issued    3,745,000 common shares at $0.02 per share for total cash proceeds of    $74,900, being $3,745 par value shares and $71,115 for additional paid-in    capital, to 36 independent investors.

A total of 5,545,000 common shares are outstanding at    September 30, 2006.

 
**4. Development in Progress**
On March 29, 2006, through the wholly-owned subsidiary Deltron Holdings  Corporation S.A., a property was purchased for $40,657. The funds to purchase  the property were loaned to Deltron Holdings Corporation S.A., by Shawn  Phillips, the President of the Company.

As at September 30, 2006, the Company has incurred development costs of  $7,860, relating to architecture and construction permit fees.
** 

5. Related Party Balances and Transactions**
Related party transactions not disclosed elsewhere in these financial  statements are as follows.

As at September 30, 2006, the Company owed an individual, who is a director  and officer of the Company $42,765 (September 30, 2005 - $1,332). This balance  is non-interest bearing and is due on demand.

These transactions are in the normal course of operations and are measured  at the exchange amount, which is the amount of consideration established and  agreed to by the related parties.

 
**Deltron, Inc.***(A Development Stage Company)Notes    to Consolidated Financial Statements    September 30, 2006 and 2005** 

6. Income Taxes 

The Company recognizes deferred tax assets and liabilities  for temporary differences between the financial reporting and tax bases of its  assets and liabilities. At September 30, 2006 the Company has an estimated net  operating loss carryforward for federal tax purposes of $42,597, which, if  unused to offset future taxable income, will begin to expire in 2025 and  continue through 2026. The potential future tax benefits of these losses have  not been recognized in these financial statements due to uncertainty of their  realization. A 100% valuation allowance has been recognized to offset the  entire related deferred tax asset due to the uncertainty of realizing the  benefit.
** 

7.**New Accounting Pronouncements**
Recent accounting pronouncements that are listed below did and/or are not  currently expected to have a material effect on the Company's financial  statements.
**FASB Statements:**
In December 2004, the FASB issued  Financial Accounting Standards No 123 (revised 2004) (SFAS 123R), *"Share-Based Payment."* SFAS 123R replaces SFAS No. 123*, "Accounting for  Stock-Based Compensation,"*and supersedes APB Opinion No. 25, *"Accounting for Stock Issued to Employees*." SFAS 123R requires  compensation expense, measured as the fair value at the grant date, related to  share-based payment transactions to be recognized in the financial statements  over the period that an employee provides service in exchange for the award.  SFAS 123R is effective in fiscal periods that begin after December 15, 2005.  

In December 2004, FASB issued Financial Accounting  Standards No. 153, *"Exchanges of Non-monetary Assets, an amendment of APB  Opinion No. 29, Accounting for Non-Monetary Transactions (SFAS 153)."* This  statement amends APB Opinion 29 to eliminate the exception for non-monetary  exchanges of similar productive assets and replaces it with a general  exception for exchanges of non-monetary assets that do not have commercial  substance. Under SFAS 153, if a non-monetary exchange of similar productive  assets meets a commercial-substance criterion and fair value is determinable,  the transaction must be accounted for at fair value resulting in recognition  of any gain or loss. SFAS 153 is effective in fiscal periods that begin after  June 15, 2005. 

In May 2005, the FASB issued SFAS No. 154, *"Accounting  Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB  Statement No. 3."* This statement changes the requirements for the  accounting for and reporting of a change in accounting principle. Previously,  Opinion 20 required that most voluntary changes in accounting principle be  recognized by including in net income of the period of change the cumulative  effect of changing to a new principle. This statement requires retrospective  application to prior periods' financial statements of changes in accounting  principle, when practicable. 

 
**Deltron, Inc.***(A Development Stage Company)Notes to    Consolidated Financial StatementsSeptember 30,    2006 and 2005
 
**7.**New Accounting Pronouncements***- Continued** **
In February 2006, FASB issued Financial Accounting  Standards No. 155, "Accounting for Certain Hybrid Financial Instruments - an  amendment of FASB Statements No. 133 and 140. This Statement amends FASB  Statements No. 133, *Accounting for Derivative Instruments and Hedging  Activities,* and No. 140, *Accounting for Transfers and Servicing of  Financial Assets and Extinguishments of Liabilities.* This Statement  resolves issues addressed in Statement 133 Implementation Issue No. D1, *"Application of Statement 133 to Beneficial Interests in Securitized Financial  Assets."* SFAS 155 is effective for all financial instruments acquired or  issued after the beginning of an entity's first fiscal year that begins after  September 15, 2006.

In March 2006, FASB issued Financial Accounting Standards  No. 156, "Accounting for Servicing of Financial Assets - an amendment of FASB  Statement No. 140." This Statement amends FASB Statement No. 140, Accounting  for Transfers and Servicing of Financial Assets and Extinguishments of  Liabilities, with respect to the accounting for separately recognized  servicing assets and servicing liabilities. SFAS 156 is effective in the first  fiscal year that begins after September 15, 2006.

In September 2006, FASB issued Financial Accounting  Standards No. 157, "Fair Value Measurements." This Statement defines fair  value, establishes a framework for measuring fair value in generally accepted  accounting principles (GAAP), and expands disclosures about fair value  measurements. This Statement applies under other accounting pronouncements  that require or permit fair value measurements, the Board having previously  concluded in those accounting pronouncements that fair value is the relevant  measurement attribute. Accordingly, this Statement does not require any new  fair value measurements. However, for some entities, the application of this  Statement will change current practice. SFAS 157 is effective in the first  fiscal year that begins after November 15, 2007.

In September 2006, FASB issued Financial Accounting  Standards No. 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 overfunded or underfunded 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. SFAS 158 is effective. 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 first fiscal year ending after December 15, 2006.
** 

 ****ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ANDFINANCIAL DISCLOSURE**
None.
**ITEM 8A. CONTROLS AND PROCEDURES**
As of September 30, 2006, the Company carried out an evaluation of theeffectiveness of the Company's disclosure controls and procedures (as defined byRule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) underthe supervision and with the participation of the Company's Chief ExecutiveOfficer and Chief Financial Officer. Based on and as of the date of suchevaluation, the aforementioned officer has concluded that the Company'sdisclosure controls and procedures were effective. 

The Company also maintains a system of internal accounting controls that isdesigned to provide assurance that assets are safeguarded and that transactionsare executed in accordance with management's authorization and properlyrecorded. This system is continually reviewed to monitor its effectiveness.During the fiscal year ended September 30, 2006, there were no changes to thissystem of internal controls or in other factors that could affect thosecontrols. 
**ITEM 8B.    OTHER INFORMATION**
No items required to be reported on Form 8-K during the fourth quarter of theyear covered by this report were not previously reported on Form 8-K.

 
**PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROLPERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGEACT**
Directors are elected by the stockholders to a term of one year and serveuntil their successor is elected and qualified. Officers are elected by theBoard of Directors to a term of one year and serve until their successor is dulyelected and qualified, or until they are removed from office. The Board ofDirectors has no nominating, auditing or compensation committees.

The name, address, age and position of our officers and director is set forthbelow:

 
    Name and AddressAgePosition(s)    Shawn Phillips    37    President, CEO, CFO, Treasurer, and    Suite #410     member of the Board of Directors    1040 West Georgia Street    Vancouver, BC Canada V6E 4H1     Fernando Porras    47    Secretary and member of the Board of Directors    Sabana Oeste,    Restaurante Princessa Marina    100 metros Oeste
San Jose, Republica de Costa Rica

 

Hilda Rivera

40

Member of the Board of Directors
    Sabana Oeste,    Restaurante Princessa Marina    100 metros Oeste
San Jose, Republica de Costa Rica

The persons named above have held their offices/positions since inception ofour Company and are expected to hold said offices/positions until the nextannual meeting of our stockholders. The officers and directors are our onlyofficers, directors, promoters and control persons.

Background Information about Our Officers and Directors
**Shawn Phillips**
Mr. Phillips has over 18 years experience in the direct marketing industryspecializing in both business-to-business and direct to consumer mail-ordersales.

He has sold millions of dollars worth of informational reports/bookletsranging from how to live a healthier and more prosperous life, to discountcoupon books, financial services, semi-precious jewelry, travel information, andorganic foods.

Mr. Phillips has spent three of the last five years living in San Jose CostaRica operating a direct to consumer mail-order firm that markets variousinformation products by mail to the United States and Europe. 

He now divides his time between Costa Rica and Vancouver, Canada, where hecurrently resides.
**Fernando Porras**
Mr. Porras is a trained Computer Engineer who in 1988 received his Bachelorof Engineering degree from the U.A.C.A. (University Autonoma of Central America)in San Jose, Costa Rica.

For the last three years he has worked for Q.M. & A. of Costa Rica as aconsultant in their effort to acquire the building rights to a power plantproject in Costa Rica that the government plans to build on the country's westcoast in 2007.

Prior to his involvement with Q.M.& A. Mr. Porras acted as the SystemsAdministrator for Hitachi in Costa Rica.
**Hilda Rivera**
Ms. Rivera is a Land Developer and convenience store proprietor living in SanJose, Costa Rica.

In the last five years Mrs. Rivera has developed six residential propertiesin Costa Rica which she currently rents to the public.
**Involvement in Certain Legal Proceedings**
To our knowledge, during the past five years, no present or former directoror executive officer of our company: (1) filed a petition under the federalbankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent orsimilar officer appointed by a court for the business or present of such aperson, or any partnership in which he was a general partner at or within twoyears before the time of such filing, or any corporation or business associationof which he was an executive officer within two years before the time of suchfiling; (2) was convicted in a criminal proceeding or named subject of a pendingcriminal proceeding (excluding traffic violations and other minor offenses); (3)was the subject of any order, judgment or decree, not subsequently reversed,suspended or vacated, of any court of competent jurisdiction, permanently ortemporarily enjoining him from or otherwise limiting the following activities: (i)acting as a futures commission merchant, introducing broker, commodity tradingadvisor, commodity pool operator, floor broker, leverage transaction merchant,associated person of any of the foregoing, or as an investment advisor,underwriter, broker or dealer in securities, or as an affiliated person,director of any investment company, or engaging in or continuing any conduct orpractice in connection with such activity; (ii) engaging in any type of businesspractice; (iii) engaging in any activity in connection with the purchase or saleof any security or commodity or in connection with any violation of federal orstate securities laws or federal commodity laws; (4) was the subject of anyorder, judgment or decree, not subsequently reversed, suspended or vacated, ofany federal or state authority barring, suspending or otherwise limiting formore than 60 days the right of such person to engage in any activity describedabove under this Item, or to be associated with persons engaged in any suchactivity; (5) was found by a court of competent jurisdiction in a civil actionor by the Securities and Exchange Commission to have violated any federal orstate securities law and the judgment in subsequently reversed, suspended orvacate; (6) was found by a court of competent jurisdiction in a civil action orby the Commodity Futures Trading Commission to have violated any federalcommodities law, and the judgment in such civil action or finding by theCommodity Futures Trading Commission has not been subsequently reversed,suspended or vacated. 
**Audit Committee and Charter**
We have a separately-designated audit committee of the board. Audit committeefunctions are performed by our board of directors. None of our directors aredeemed independent. All directors also hold positions as our officers. Our auditcommittee is responsible for: (1) selection and oversight of our independentaccountant; (2) establishing procedures for the receipt, retention and treatmentof complaints regarding accounting, internal controls and auditing matters; (3)establishing procedures for the confidential, anonymous submission by ouremployees of concerns regarding accounting and auditing matters; (4) engagingoutside advisors; and, (5) funding for the outside auditory and any outsideadvisors engagement by the audit committee.
**Audit Committee Financial Expert**
None of our directors or officers has the qualifications or experience to beconsidered a financial expert. We believe the cost related to retaining afinancial expert at this time is prohibitive. Further, because of our limitedoperations, we believe the services of a financial expert are not warranted.
**Code of Ethics**
We have adopted a corporate code of ethics. We believe our code of ethics isreasonably designed to deter wrongdoing and promote honest and ethical conduct;provide full, fair, accurate, timely and understandable disclosure in publicreports; comply with applicable laws; ensure prompt internal reporting of codeviolations; and provide accountability for adherence to the code.
**Disclosure Committee and Charter**
We have a disclosure committee and disclosure committee charter. Ourdisclosure committee is comprised of all of our officers and directors. Thepurpose of the committee is to provide assistance to the Chief Executive Officerand the Chief Financial Officer in fulfilling their responsibilities regardingthe identification and disclosure of material information about us and theaccuracy, completeness and timeliness of our financial reports.
**Employment Agreements**
We have no employment contracts with any of our officers or employees. 
**ITEM 10. EXECUTIVE COMPENSATION**
Currently, none of our officers and/or directors is being compensated fortheir services during the development stage of our business operations. 

The officers and directors are reimbursed for any out-of-pocket expenses theyincur on our behalf. In addition, in the future, we may approve payment ofsalaries for our officers and directors, but currently, no such plans have beenapproved. We also do not currently have any benefits, such as health insurance,life insurance or any other benefits available to our employees.

In addition, none of our officers, directors or employees is party to anyemployment agreements.

    SUMMARY COMPENSATION TABLE      Annual Compensation     Long-Term Comp.        Other    Awards    Payouts    Name and       Annual    Position(s)    Year    Salary    Bonus    Comp.      Shawn Phillips    2006    None    None    None    None    None
President, Treasurer,

2005

None

None

None

None

None
    CEO, CFO & Director           Fernando Porras    2006    None    None    None    None    None    Secretary & Director    2005    None    None    None    None    None           Hilda Rivera    2006    None    None    None    None    None
Director

2005

None

None

None

None

None

 

There has been no cash payment paid to the executive officers for servicesrendered in all capacities to us for the fiscal period ended September 30, 2006.There has been no compensation awarded to, earned by, or paid to the executiveofficers by any person for services rendered in all capacities to us for thefiscal period ended September 30, 2006.
**Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensationintended to serve as incentive for performance.
**Compensation of Directors**
Our directors do not receive any compensation for serving as members on theboard of directors. 
**Employment Contracts**
As of the date hereof, we have not entered into employment contracts with anyof our officers and do not intend to enter into any employment contracts untilsuch time as it profitable to do so. 
**Indemnification**
Under our Bylaws, we may indemnify an officer or director who is made a partyto any proceeding, including a law suit, because of his position, if he acted ingood faith and in a manner he reasonably believed to be in our best interest. Wemay advance expenses incurred in defending a proceeding. To the extent that theofficer or director is successful on the merits in a proceeding as to which heis to be indemnified, we must indemnify him against all expenses incurred,including attorney's fees. With respect to a derivative action, indemnity may bemade only for expenses actually and reasonably incurred in defending theproceeding, and if the officer or director is judged liable, only by a courtorder. The indemnification is intended to be to the fullest extent permitted bythe laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of1933, which may be permitted to directors or officers under Nevada law, we areinformed that, in the opinion of the Securities and Exchange Commission,indemnification is against public policy, as expressed in the Act and is,therefore, unenforceable.
**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTT ANDRELATED STOCKHOLDER MATTERS**
The Company currently has no equity compensation plans and thus has nosecurities authorized for issuance under such plans.

The following table sets forth, as of the date of this prospectus, the totalnumber of shares owned beneficially by each of our directors, officers and keyemployees, individually and as a group, and the present owners of 5% or more ofour total outstanding shares. The table also reflects what such ownership willbe assuming completion of the sale of all shares in this offering, which wecan't guarantee. The stockholders listed below have direct ownership of theirshares and possess sole voting and dispositive power with respect to the shares:

 
 Name and AddressAmount & BeneficialNaturePercentageTitle of ClassOwnerof Ownershipof Class    CommonShawn Phillips00%Suite #4101040 West Georgia StreetVancouver, BCCanada V6E 4H1 
Common

Fernando Porras

400,000

7.2%
Sabana Oeste,Restaurante Princessa Marina100 metros Oeste
San Jose, Republic de Costa Rica

 

Common

Hilda Rivera

400,000

7.2%
Sabana Oeste,Restaurante Princessa Marina100 metros Oeste
San Jose, Republic de Costa Rica
 All Officers andDirectors as a Group 800,00014.4% CommonYoenia Proenza Sanfiel(1)1,000,00018.0%Suite #4101040 West Georgia StreetVancouver, BCCanada V6E 4H1
(1) Ms. Yoenia Proenza Sanfiel is the wife of our President, Shawn Phillips.
**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,DIRECTOR INDEPENDENCE**
In October 2005, 400,000 shares of Deltron's common stock were issued toFernando Porras, an officer and director of the company and 400,000 shares ofDeltron's common stock were issued to Hilda Rivera, a director of the company,in exchange for $0.02 per share, or a total of $16,000 in cash.

In September 2005, 500,000 shares of Deltron's common stock was issued, inexchange for $0.01 per share, or a total of $5,000 in cash and in October 2005,500,000 shares of common stock was issued, in exchange for $0.02 per share, or atotal of $10,000 in cash to Yoenia Proenza Sanfiel. Shawn Phillips, an officerand director, and Yoenia Proenza Sanfiel, a majority shareholder, are married.

As at September 30, 2006, the Company owed Shawn Phillips, a director andofficer of the company $42,765. This balance is non-interest bearing and is dueon demand.

On March 29, 2006, through our wholly-owned subsidiary Deltron HoldingCorporation S.A. we purchased our first property for $40,657.00 from anun-affiliated third party. The funds to purchase the property were loaned toDeltron Holding by Shawn Phillips, our President. The balance is non-interestbearing and there are no specific terms of repayment. When we have sufficientrevenue to maintain operations, being generated from the rental of the proposedproperties, the Board of Directors will at that time address terms of repaymentto Mr. Phillips.  This is not expected to occur within the first year ofoperations. In the event our business plan fails and we are forced to sell theproperty, the loan would be repaid from the proceeds of the sale.
**ITEM 13. EXHIBITS**
The following Exhibits are incorporated herein by reference from theRegistrant's Form SB-2 Registration Statement filed with the Securities andExchange Commission, SEC file #333-130197. Such exhibits are incorporated hereinby reference pursuant to Rule 12b-32:
**Exhibit No.****Document Description**
3.1Articles of Incorporation.    
3.2Bylaws. 
5.1Opinion re: Legality.
10Property Purchase Agreement
23.1Consent of Independent Auditor.
23.2Consent of Counsel (See Exhibit    5)
99.1Subscription Agreement.
99.2Rental Agreement
The following exhibits are included with this filing:
    Exhibit    Number Description14.1 Code of Ethics31.1 Sec. 302 Certification of Principal Executive Officer and PrincipalFinancial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.32.1 Sec. 906 Certification of pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief ExecutiveOfficer and Chief Financial Officer).99.1 Audit Committee Charter.99.2 Disclosure Committee Charter.**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**
 

Audit Fees: All fees billed for each of the last two fiscal years forprofessional services rendered by the principal accountant for the audit of theregistrant's annual financial statements and the review of financial statementsincluded in the registrant's Form 10-QSB or services that are normally providedby the accountant in connection with statutory and regulatory filings orengagements for those fiscal years. 
 2006: $10,700 2005: $ 4,630
Audit-Related Fees: All fees billed in each of the last two fiscal yearsfor assurance and related services by the principal accountant that arereasonably related to the performance of the audit or review of the registrant'sfinancial statements and are not reported under Item 9(e)(f1) of Schedule 14A.
 2006: $ 0.00 2005: $ 0.00
Tax Fees: The aggregate fees billed in each of the last two fiscal yearsfor professional services rendered by the principal accountant for taxcompliance, tax advice, and tax planning:
 2006: $ 0.00Nature of Services: None (see    note below) 2005: $ 843Nature of Services: Tax Return    (compliance)
Preparation of the Company's corporate tax return for the fiscal year endedSeptember 30, 2006 will not be performed by our principal accountants.

All Other Fees:
 2006: $ 0.00 2005: $ 0.00
(5)   Our audit committee's pre-approval policies and proceduresdescribed in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that theaudit committee pre-approve all accounting related activities prior to theperformance of any services by any accountant or auditor.

(6)   The percentage of hours expended on the principalaccountant's engagement to audit our financial statements for the most recentfiscal year that were attributed to work performed by persons other than theprincipal accountant's full time, permanent employees was 0%. 

 **SIGNATURES**
In accordance with Section 13 or 15(d) of the Exchange Act,the registrant caused this report to be signed on its behalf by the undersigned,thereunto duly authorized. 

December 27, 2006                                                                     DELTRON, INC., REGISTRANT

By: /s/ Shawn Phillips

______________________________

Shawn Phillips, President, Treasurer, Principal Executive

Officer, Principal Accounting Officer, Principal                    Financial Officer, & Member of the Board of Directors

In accordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

December 27, 2006                                                                     By: /s/ Shawn Phillips

______________________________

Shawn Phillips, President, Treasurer, Principal Executive Officer,

Principal Accounting Officer, Principal Financial Officer, &

Member of the Board of Directors

December 27, 2006                                                                     By: /s/ Fernando Porras

______________________________

Fernando Porras, Secretary & Member of the Board of Directors***************************************************************

**