---

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# UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-QSB

|x | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT           OF 1934
|- | -------------------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2007

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

For the transition period from _______________ to _______________

Commission file number 000-50482

|ACRO INC.                                                        
|-----------------------------------------------------------------
|                                                                 
|(Exact Name of Small Business Issuer as Specified in Its Charter)

|Nevada                                                         | 98-0377767                          
|-------------------------------------------------------------- | ------------------------------------
|                                                               |                                     
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

37 Inbar St., Caesarea 30889, Israel(Address of Principal Executive Offices)

|+972-4-636-0297                                 
|------------------------------------------------
|                                                
|(Issuer's Telephone Number, Including Area Code)

|                                                                                  
|----------------------------------------------------------------------------------
|                                                                                  
|(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.

Yes x No o

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes o     No x

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

Check whether the registrant filed
all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed by a court.

Yes o No o

# APPLICABLE ONLY TO
CORPORATE ISSUERS

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest
practicable date: The aggregate market value of the
shares of common stock held by non-affiliate computed based on the average bid and asked
prices of shares of common stock on November 12, 2007, is $6,754,327.

The number of shares
outstanding of the issuers common stock, as of November 2, 2007: 67,543,275.

Transitional Small Business
Disclosure Format (Check one):

Yes o No x



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Item 1. Financial Statements.

Our consolidated financial statements
are stated in United States Dollars (US$) and are prepared in accordance with United
States Generally Accepted Accounting Principles.

|Acro Inc. (a Development Stage Company)
|---------------------------------------
|                                       
|Consolidated Balance Sheets (Unaudited)
|                                       

|                                                    | September 30
2007 | December 31
2006
|--------------------------------------------------- | ----------------- | ----------------
|
|
|
|
|Assets                                              |                   |                 
|                                                    |                   |                 
|Current assets:                                     |                   |                 
|Cash and cash equivalents                           |                   |                 
|Short term deposits                                 |                   |                 
|Restricted cash                                     |                   |                 
|Trade receivables                                   |                   |                 
|Prepaid expenses and other current assets           |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total current assets                                |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Other non-current assets                            |                   |                 
|Property and equipment, net                         |                   |                 
|Intangible assets, net                              |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total assets                                        |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Liabilities and stockholders' equity                |                   |                 
|                                                    |                   |                 
|Current liabilities:                                |                   |                 
|Short term bank-credit                              |                   |                 
|Accounts payable and accrued liabilities            |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total current liabilities                           |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Accrued severance pay                               |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total liabilities                                   |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Commitments (Note 8)                                |                   |                 
|                                                    |                   |                 
|Stockholders' equity:                               |                   |                 
|Common stock; $0.001 par value; 700,000,000 shares  |                   |                 
|authorized 67,509,943  and 64,931,688 shares issued |                   |                 
|and outstanding as of September 30, 2007 and        |                   |                 
|December 31, 2006, respectively                     |                   |                 
|Additional paid-in capital                          |                   |                 
|Accumulated deficit during the development stage    |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total stockholders' equity                          |                   |                 
|                                                    |                   |                 
|                                                    |                   |                 
|Total liabilities and stockholders' equity          |                   |                 
|                                                    |                   |                 

See accompanying notes to the
consolidated financial statements.

2

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|Acro Inc. (a Development Stage Company)          
|-------------------------------------------------
|                                                 
|Consolidated Statements of Operations (Unaudited)
|                                                 

|                                                | Three months endedSeptember 30 | Nine months ended September 30 | Cumulativefrom Inception(May 22, 2002)to September302007
|----------------------------------------------- | ------------------------------ | ------------------------------ | --------------------------------------------------------
|
|
|
|
|Revenues                                        |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Costs and expenses:                             |                                |                               
|                                                |                                |                               
|Research and development                        |                                |                                |                                                         
|Sales and marketing                             |                                |                                |                                                         
|General and administrative*                     |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Total operating expenses                        |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Operating loss                                  |                                |                                |                                                         
|                                                |                                |                               
|Interest and other income (expenses), net       |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Loss before income tax                          |                                |                                |                                                         
|Income tax                                      |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Net loss                                        |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Basic and diluted net loss per common share     |                                |                                |                                                         
|                                                |                                |                                |                                                         
|                                                |                                |                               
|Weighted average shares used in computing basic |                                |                               
|and diluted net loss per common share           |                                |                                |                                                         
|                                                |                                |                                |                                                         

|* | Includes
$5,000, $172,344; $258,664, $448,158 and $1,008,004 in stock-based compensation to
non-employees for the three months ended September 30, 2007 and 2006; for the nine months
ended September 30, 2007 and 2006, and for the cumulative period from May 22, 2002 (date
of inception) to September 30, 2007, respectively.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to the
consolidated financial statements.

3

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|Acro Inc. (a Development Stage Company)          
|-------------------------------------------------
|                                                 
|Consolidated Statements of Cash Flows (Unaudited)
|                                                 

|                                                     | Nine months ended September 30 | Cumulativefrom Inception(May 22, 2002)to September 30
|---------------------------------------------------- | ------------------------------ | -----------------------------------------------------
|
|
|
|
|Cash flows from operating activities:                |                                |                                                      
|Net loss                                             |                                |                                                      
|Adjustments to reconcile net loss to net cash        |                                |                                                      
|used in operating activities:                        |                                |                                                      
|Depreciation and amortization                        |                                |                                                      
|Stock-based compensation                             |                                |                                                      
|Services contributed by officers                     |                                |                                                      
|                                                     |                                |                                                      
|Changes in operating assets and liabilities:         |                                |                                                      
|Trade receivables                                    |                                |                                                      
|Prepaid expenses and other current assets            |                                |                                                      
|Accounts payable and accrued liabilities             |                                |                                                      
|Accrued severance pay                                |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Net cash used in operating activities                |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Cash flows from investing activities:                |                                |                                                      
|Purchase of property and equipment                   |                                |                                                      
|Purchase of intangible assets                        |                                |                                                      
|Increase in restricted cash                          |                                |                                                      
|Increase in short-term deposits                      |                                |                                                      
|Decrease (increase) in other long-term assets        |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Net cash used in investing activities                |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Cash flows from financing activities:                |                                |                                                      
|Increase (decrease) in short-term credit             |                                |                                                      
|Proceeds from sale common stock and warrants         |                                |                                                      
|Offering costs                                       |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Net cash provided by financing activities            |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Net increase (decrease) in cash and cash equivalents |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Cash and cash equivalents at beginning of period     |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Cash and cash equivalents at end of period           |                                |                                                      
|                                                     |                                |                                                      
|                                                     |                                |                                                      
|Supplemental disclosures of cash flow information:   |                                |                                                      
|Cash paid for interest                               |                                |                                                      
|                                                     |                                |                                                      
|Cash paid for taxes                                  |                                |                                                      
|                                                     |                                |                                                      

See accompanying notes to the consolidated
financial statements.

4

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 1  Business

| | ACRO,
Inc. (A Development Stage Company) (the Company), was incorporated on May 22,
2002, under the laws of the State of Nevada, as Medina International Corp. On May 4,
2006, the Company changed its name to ACRO, Inc. The Company originally was an oil and
gas consulting company in Canada and in the United States. However, during 2006,
following a change of control and a private placement financing, the Company ceased to
engage in the oil and gas consulting business and engaged in development of products for
the detection of explosive materials for the homeland security market.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Since
its inception, the Company has no significant revenues and in accordance with Statement
of Financial Accounting Standard (SFAS) No. 7 Accounting and Reporting
by Development Stage Enterprises, the Company is considered a development stage
company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
accompanying financial statements have been prepared on a basis that contemplates the
realization of assets and the satisfaction of liabilities and commitments in the normal
course of business. The Company has cumulative losses for the period from inception (May
22, 2002) through September 30, 2007 of $2,453,668. Management believes that the Company
has sufficient cash and working capital to support forecasted operating results, capital
expenditures and commitments through at least September 30, 2008. If such available
sources of cash are not sufficient, management has a plan to reduce expenses so that it
can continue to meet its obligations. However, the viability of the Company for a
significant period of time beyond September 30, 2008 is dependent on its ability to
generate cash flow from product sales or to obtain additional financing. The financial
statements do not include any adjustments that might result from the outcome of this
uncertainty.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 2  Summary of
Accounting Policies

| | A. | Basis
of presentation
| | -- | ---------------------

| | These
financial statements are unaudited and, in the opinion of management, all adjustments
necessary for a fair presentation of such financial statements have been recorded. Such
adjustments consisted only of normal recurring items. Consolidated balance sheet
information as of December 31, 2006 included herein was derived from the audited
consolidated balance sheet as of December 31, 2006 included in the Companys Annual
Report on Form 10-KSB for the year ended December 31, 2006.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
accompanying unaudited consolidated financial statements were prepared in accordance with
the instructions for Form 10-QSB and, therefore, do not include all disclosures necessary
for a complete presentation of financial condition, results of operations, and cash flows
in conformity with generally accepted accounting principles. All adjustments, which are,
in the opinion of management, of a normal recurring nature and are necessary for a fair
presentation of the interim financial statements, have been included. Nevertheless, these
financial statements should be read in conjunction with the consolidated financial
statements and related notes included in the Companys Annual Report on Form 10-KSB
for the year ended December 31, 2006. The results of operations for the three month and
nine month periods ended September 30, 2007 are not necessarily indicative of the results
that may be expected for the entire fiscal year or any other interim period.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 2  Summary of
Accounting Policies (contd)

| | B. | Use
of estimates in the preparation of financial statements
| | -- | -----------------------------------------------------------

| | The
preparation of the consolidated financial statements in conformity with U.S generally
accepted accounting principles (US GAAP) 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 financial statement date and the
reported expenses during the reporting periods. Actual results could differ from those
estimates.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | C. | Principles
of consolidation
| | -- | ---------------------------

| | The
consolidated financial statements include the accounts of the Company and its
wholly-owned Israeli subsidiary, ACROSEC Ltd. All material intercompany transactions and
balances have been eliminated in consolidation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | D. | Cash,
Cash equivalents, Restricted Cash and Short-term deposits
| | -- | ---------------------------------------------------------------

| | The
Company considers all highly liquid investments, which include short-term deposits with
original maturities of three months or less from the date of purchase that are not
restricted as to withdrawal or use and are readily convertible to known amounts of cash,
to be cash equivalents.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Restricted
cash is comprised of a deposit pledged as collateral in connection with credit line.
Short-term deposits are comprised of a deposit in bank with original maturities more than
three months from the date of purchase.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | E. | Foreign
currency translation
| | -- | ----------------------------

| | The
Company considers the functional currency of the parent and subsidiary companies to be in
US dollars and accordingly, the accompanying financial statements have been prepared in
US dollars. Assets and liabilities denominated in foreign currencies are translated using
the exchange rate on the balance sheet date. Revenue and expenses are translated at
average exchange rates prevailing during the year. Foreign currency transaction gains and
losses, which to date have not been material, are included in the Consolidated Statements
of Operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | F. | Accounting
for stock-based compensation
| | -- | ---------------------------------------

| | Prior
to fiscal 2006, the Company applied the intrinsic value method as prescribed in
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees
(APB No. 25), and related interpretations, in accounting for stock options granted
under the stock option plan. Under the intrinsic value method, no compensation cost is
recognized if the exercise price of the Companys employee stock options was equal
to or greater than the market price of the underlying stock on the date of the grant. No
compensation cost was recognized in the accompanying consolidated statements of
operations prior to fiscal year 2006 as no options or similar instruments had been
granted during that period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of January 1, 2006 the Company adopted SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123(R)). All stock-based awards to non employees are
accounted for at their fair value in accordance with SFAS No. 123(R) and in accordance
with 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 and Services (EITF 96-18). The Company accounts for stock-based
awards to employees in accordance with SFAS No. 123(R) and related interpretations, which
requires all share-based payments to employees to be recognized based on their fair
values. The Company recorded the stock based compensation granted to a consultant on the
date the consultant earned the awarded shares in the same manner as if the Company paid
cash to the consultant for his services.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 2  Summary of
Accounting Policies (contd)

| | G. | Loss
per share
| | -- | --------------

| | The
Company computes basic loss per share by dividing net loss by the weighted average number
of shares of common stock outstanding or issuable to consultants. Warrants to purchase
shares of common stock were excluded from the computation of diluted net loss per share
for the reported periods, as such warrants were anti-dilutive since the Company incurred
losses in those periods.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | H. | Reclassifications
| | -- | -----------------

| | Certain
prior period amounts have been reclassified in order to conform to the current period
presentation.
| | -----------------------------------------------------------------------------------------------------------

| | I. | Recently
issued accounting pronouncements
| | -- | -----------------------------------------

| | In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement No. 157, Fair Value Measurements, (SFAS No. 157). SFAS
No. 157 defines fair value (replacing all prior definitions) and creates a framework to
measure fair value, but does not create any new fair value measurements. SFAS No. 157 is
effective in the first quarter of fiscal years beginning after November 15, 2007. The
Company is currently evaluating the effect that the application of SFAS No. 157 will have
on its consolidated financial statements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
its September 2006 meeting, the FASBs Emerging Issue Task Force reached a consensus
on Issue No. 06-1, Accounting for Consideration Given by a Service Provider to
Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service
from the Service Provider, that if the consideration given by a service provider to
a manufacturer or reseller (that is not a customer of the service provider) can be linked
contractually to the benefit received by the service providers customer, a service
provider should use the guidance in EITF 01-9 to characterize the consideration. EITF
01-9 presumes that an entity should characterize cash consideration as a reduction of
revenue unless an entity meets the requirements of paragraph 9 of EITF 01-9. Under EITF
01-9, other than cash considerations should be characterized as an expense. If the
service provider does not control the form of the consideration provided to the service
providers customer, the consideration should be characterized as other than cash.
The consensus is effective for the first annual reporting period beginning after June 15,
2007. Early adoption is permitted for financial statements that have not yet been issued.
Entities should recognize the effects of applying the consensus on this Issue as a change
in accounting principle through retrospective application to all prior periods under
Statement 154. Adoption of this Issue is not expected to have a material impact on the
Companys consolidated financial position, results of operations or cash flows.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
February 2007, the FASB issued Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities  Including an amendment of FASB
Statement No. 115", which permits entities to choose to measure many financial
instruments at fair value. The Statement allows entities to achieve an offset accounting
effect for certain changes in fair value of certain related assets and liabilities
without having to apply complex hedge accounting provisions, and is expected to expand
the use of fair value measurement consistent with the Boards long-term objectives
for financial instruments. This Statement is effective as of the beginning of an entitys
first fiscal year that begins after November 15, 2007. The Company does not anticipate
that the adoption of this new statement at the required effective date will have a
significant effect in its results of operations, financial position or cash flows.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 2  Summary of
Accounting Policies (contd)

| | J. | Recently
adopted accounting standards
| | -- | -------------------------------------

| | On
January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB)
Interpretation No. 48 (FIN 48) Accounting for Uncertain Tax Positions
 An Interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in an enterprises financial statements
in accordance with SFAS No. 109 Accounting for Income Taxes. It prescribes a
recognition threshold and measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. FIN 48
also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. The Company adopted FIN 48 as
of January 1, 2007 and there was no material effect on the financial statements. As a
result, the Company did not record any cumulative effect related to adopting FIN 48.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of January 1, 2007, the Company did not have any unrecognized tax benefits. The Companys
accounting policy is to accrue interest and penalties related to uncertain tax positions
as a component of income taxes.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company files income tax returns in the U.S. federal jurisdiction and foreign
jurisdictions. The Company is currently subject to audit under the statue of limitations
by the Internal Revenue Service for the years ending December 31, 2002 through 2006. The
foreign subsidiary was incorporated in March 2006 and its initial 2006 tax return is
subject to foreign examination by its local tax authority when filed. The Company does
not expect that the amount of unrecognized tax benefits will change significantly within
the next 12 months.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 3  Property
and Equipment, Net

| |                                                 | Estimateduseful life(years) | September 302007 | December 312006
| | ----------------------------------------------- | --------------------------- | ---------------- | ---------------
|
|
|
|
| | Computer equipment                              |                             |                  |                
| | Production equipment                            |                             |                  |                
| | Furniture                                       |                             |                  |                
| | Leasehold Improvements                          |                             |                  |                
| |                                                 |                             |                  |                
| |                                                 |                             |                  |                
| |                                                 |                             |                  |                
| | Less -accumulated depreciation and amortization |                             |                  |                
| |                                                 |                             |                  |                
| |                                                 |                             |                 
| |                                                 |                             |                  |                
| |                                                 |                             |                  |                

| | (*)     over
the term of the lease
| | ----------------------------------

Depreciation expense for the three
month and nine month periods ended September 30, 2007 and 2006 and for the cumulative
period from May 22, 2002 (date of inception) to September 30, 2007 were $9,572, $24,584,
$4,870, $4,916 and $36,793 respectively.

8

---

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 4  Intangible
Assets

| | In
March 2006, the Company purchased a patent from Ehud Keinan (Keinan), a
stockholder who holds 30.5% of the Companys shares of common stock, in
consideration of $120,000. The patent is being amortized over the life of the asset which
is estimated at 10 years. Amortization expense for the three and nine month periods ended
September 30, 2007 and 2006 and for the cumulative period from May 22, 2002 (date of
inception) to September 30, 2007 was $3,000, $9,000 $3,000, $6,493, and $18,493,
respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 5  Stock
Transactions

| | On
February 27, 2007, the Company consummated a private placement of 2,000,000 units, at a
price of $0.75 per unit, for aggregate proceeds of $1,500,000, each unit comprising one
share of the Companys common stock and one warrant to purchase one share of the
Companys common stock at an exercise price per share of $1.25 exercisable within
five years (Unit). In connection with the private placement, the Company paid
a finders fee of $120,000 in cash and issued a warrant to purchase 160,000 Units to
the finder.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 6 
Stock-Based Compensation

| | In
April 2006, the Company engaged a consultant to serve on the Companys advisory
board. The consultant was entitled to receive a grant of 166,666 shares of common stock
for each quarter of service provided on the Companys advisory board. As of
September 30, 2007, the company issued to the consultant 811,591 shares of common stock.
The consultant resigned from the Companys advisory board on June 19, 2007.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense recorded for the three month and nine month periods ended September 30, 2007,
2006 and for the cumulative period from May 22, 2002 (date of inception) to September 30,
2007 was $0, $213,332, $249,999, $416,665 and $881,663, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense was calculated by multiplying the amount of shares earned by their fair market
value on the last day of the service period completed by the consultant.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2006, the Company engaged an additional consultant to serve on the Companys
advisory board. The consultant receives a grant of 16,666 shares of common stock for each
quarter of service provided on the Companys advisory board, not to exceed a total
of 200,000 shares. As of September 30, 2007, the consultant had earned 89,008 shares of
common stock of which 72,342 shares were received and 16,666 were issued subsequent to
the balance sheet date on October 31, 2007.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense recorded for the three month and nine month periods ended September 30, 2007,
2006 and for the cumulative period from May 22, 2002 (date of inception) to September 30,
2007 was $2,500, $22,666, $24,999, $30,677 and $78,509, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense was calculated by multiplying the amount of shares earned by their fair market
value on the last day of the service period completed by the consultant.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2006, the Company engaged a new director to serve on the Companys Board of
Directors. As compensation, the Director received a signing bonus of $5,000, a quarterly
fee of $1,500, and for each meeting, $500 for attendance in person or $100 for attendance
via teleconference. In addition, subject to approval by the Board of Directors and
adoption of a Stock Option Plan, the Company will grant the Director 215,232 shares of
common stock of the Company at an exercise price per share that is equal to the par value
of the Companys common stock at date of grant. At the end of each quarter, the
Director may purchase up to 17,936 shares of the total shares granted. In October 2007,
as consideration for his appointment as the sole member of the Companys Audit
Committee and as the Director in  charge
of the implementation of Sarbanes Oxley requirements, the Company added an addendum to
the Directors engagement letter, under which, in addition to his existing
compensation package, the Director will receive a special bonus of $1,500 and commencing
the fourth quarter of 2007, and each quarter thereafter, quarterly fee (in addition to
the quarterly fee already paid to him) in the amount of $1,500.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 6 
Stock-Based Compensation (contd)

| | As
of September 30, 2007, no option plan has been adopted by the Company and no approval has
been given by the Board of Directors for the option grant. Therefore, no option grant
date was established and as a result, no compensation expense was incurred by the Company
for the reported periods.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
September 2006, the Company engaged an additional consultant to serve on the Companys
advisory board. The consultant receives a grant of 16,666 shares of common stock for each
quarter of service provided on the Companys advisory board, not to exceed a total
of 200,000 shares. As of September 30, 2007, the consultant had earned 66,664 shares of
common stock of which 49,998 shares were received and 16,666 shares were issued
subsequent to the balance sheet date on October 31, 2007.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense recorded for the three month and nine month periods ended September 30, 2007,
2006 and for the cumulative period from May 22, 2002 (date of inception) to September 30,
2007 was $2,500, $22,666, $0, $0 and $49,832, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation
expense was calculated by multiplying the amount of shares earned by their fair   market
value on the last day of the service period completed by the consultant.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 7  Related
Party Transactions

| | In
February 2006, the Company entered into a consulting services agreement (the Consulting
Agreement) with BioTech Knowledge LLC a limited liability company, wholly-owned by
Keinan (see Note 4), whereby Keinan has agreed to provide consulting services for
duration of three years at a monthly fee of $3,000. The Company may terminate the
Consulting Agreement with 60 days notice. During the three month and nine month periods
ended September 30, 2007, 2006 and for the cumulative period from May 22, 2002 (date of
inception) to September 30, 2007 the Company incurred $9,000, $27,000, $9,000 $21,000
and$57,000 for the consulting services provided by Keinan. In addition to the Consulting
Agreement, the Company purchased a patent from Keinan in March 2006 (see Note 4).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the three month and nine month period ended September 30, 2007 and 2006 and for the
cumulative period from May 22, 2002 (date of inception) to September 30, 2007, the
Company incurred an expense of $32,408, $91,160, $15,271, $39,565 and $146,577
respectively, for consulting services provided by the Companys Chairman of the
Board of Directors.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10

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|Acro Inc. (a Development Stage Company)                                            
|-----------------------------------------------------------------------------------
|                                                                                   
|Notes to the Consolidated Financial Statements as of September 30, 2007 (Unaudited)
|                                                                                   

# Note 8  Commitments

| | The
Company entered into non-cancellable operating lease agreements for vehicles and
premises. The future minimum lease payments under these leases at September 30, 2007 are
as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                          | Amount
| | ------------------------ | ------
|
|
|
|
| | Year ending December 31, |       
| | 2007                     |       
| | 2008                     |       
| | 2009                     |       
| | 2010                     |       
| |                          |       
| |                          |       
| |                          |       

# Note 9  Subsequent
Events

| | On
October 16, 2007, the company signed a non-binding letter of intent to acquire RAY
Detection Technology Group (RAY) in an all-stock transaction. RAY develops and provides
advanced inspection and detection systems. The parties agreed that upon the execution of
a definitive agreement, Acro will provide Ray interim financing, in accordance with an
agreed working plan up to a total of $250,000. Completion of the proposed acquisition is
subject to a number of conditions, including completion of definitive documentation on
terms satisfactory to the parties, due diligence, and the approval of the proposed
acquisition by both companies boards of directors and raising funds. RAYs
products are based on a proprietary technology, Discovery CERT, enabling trace automated
sampling of bulk goods and cargo for the detection of explosive, chemical, and biological
threats.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
October 28, 2007, the companys technology agreement with LSRI  Life Science
Research Israel Ltd., a subsidiary of IIBR  Israel Institute for Biological
Research, became effective. Under the terms of the agreement, LSRI will license the
long-proven technology of IIBRs explosives testing kit (ETK) to Acro, for
incorporation into the companys pen-like device, allowing the detection of
commercial and military explosives. The agreement is subject to minimum annual revenues
to be achieved by the company and royalties to be paid to LSRI. The new device will
complement the ACRO-P.E.T., the companys peroxide explosive tester for the
detection of improvised explosives.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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Item 2. Plan of Operation.

# FORWARD-LOOKING
STATEMENTS

This
quarterly report contains forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. These statements relate to future events
or our future financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should,
expects, plans, anticipates, believes,
estimates, predicts, potential or continue
or the negative of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other factors that may
cause our or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements.

Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities laws of the
United States, we do not intend to update any of the forward-looking statements to conform
these statements to actual results.

Our
financial statements are stated in United States Dollars (US$) and are prepared in
accordance with United States Generally Accepted Accounting Principles. In this quarterly
report, unless otherwise specified, all dollar amounts are expressed in United States
dollars. All references to common stock refer to our shares of common stock.

As
used in this quarterly report, the terms we, us, our,
and ACRO means ACRO Inc., unless otherwise indicated.

# General

We
develop products for the detection of military and commercial explosives for the homeland
security market. We were incorporated under the laws of the State of Nevada on May 22,
2002 under the name of Medina International Corp. On May 4, 2006, we changed our name to
ACRO Inc. We effected this change of name by merging our company with a wholly owned
subsidiary of our company that we had formed specifically for this purpose. We have a
wholly owned subsidiary, Acrosec Ltd., which is incorporated under the laws of the State
of Israel. Our principal executive and head office is located at 37 Inbar St., Caesarea,
Israel.

As
of September 30, 2007, we had not realized any significant revenues from operations.

Employees

We currently
do not have any employees, and our subsidiary provides us management services. Our
subsidiary hired the services of Gadi Aner who serves as our Chairman and our Interim
Chief Executive Officer and Gabby Klausner, who serves as our Chief Financial Officer. On
August 19, 2007, our subsidiary hired Shy Markevitch to serve as our Vice President
Business Development, Marketing and Sales. On October 30, 2007, our Chief Operating
Officer ceased his employment.

# Plan of Operation

Our
primary objectives over the 12 month period ending on September 30, 2008 are to
manufacture, and commercialize our first products called the Peroxide Explosives Tester or
ACRO-P.E.T and the ACRO-N.E.T, which are detection devices for explosive materials using
the intellectual property covered in U.S. Patent No. 6,767,717 and the license agreement
with LSRI.

Furthermore,
we plan to continue to set up our base of operations as our main Research &
Development base in Israel, and to initiate international Marketing & Sales
capabilities in order to reach our international market base worldwide.

Based
on the financial concerns as detailed in this document, we also intend to exploit further
our technology and develop additional products as described in the Product in
Development section below.

12

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On
October 28, 2007, our technology agreement with LSRI  Life Science Research Israel
Ltd., a subsidiary of IIBR  Israel Institute for Biological Research, became
effective. Under the terms of the agreement, LSRI will license the long-proven technology
of IIBRs explosives testing kit (ETK) to Acro, for incorporation into our pen-like
device, allowing the detection of commercial and military explosives. The agreement is
subject to minimum annual revenues to be achieved by us and royalties to be paid to LSRI.
The new device will complement the ACRO-P.E.T., the companys peroxide explosive
tester for the detection of improvised explosives.

On
October 16, 2007, we signed a non-binding letter of intent to acquire RAY Detection
Technology Group (RAY) in an all-stock transaction. RAY develops and provides advanced
inspection and detection systems. The parties agreed that upon the execution of a
definitive agreement, we will provide RAY an interim financing, in accordance with an
agreed working plan up to a total of $250,000. Completion of the proposed acquisition is
subject to a number of conditions, including completion of definitive documentation on
terms satisfactory to the parties, due diligence, and the approval of the proposed
acquisition by both companies boards of directors and raising funds. RAYs
products are based on a proprietary technology, Discovery CERT, enabling trace automated
sampling of bulk goods and cargo for the detection of explosive, chemical, and biological
threats. We may not complete a definitive documentation on terms satisfactory to the
parties and consummate the transaction, be satisfied with the due diligence process,
obtain the approval of the proposed acquisition by both companies boards of
directors, or be able to raise additional fund required for the completion of the
transaction.

Purchase or Sale of
Equipment

During
the year beginning at September 30, 2007 through September 30, 2008 we plan to purchase
equipment for a total of approximately $27,000 for software, furniture and office
equipment.

Cash Requirements

Our
cash requirement through September 30, 2008 is approximately $892,000 which we need for
implementation of our plan of operation and developing and commercializing our potential
explosive detection device. We are obligated to pay BioTech Knowledge LLC, a wholly owned
limited liability company of Dr. Ehud Keinan, $3,000 per month for consulting services to
be provided by Dr. Keinan. Dr. Keinan is a stockholder who holds approximately 30.5% of
Acros outstanding common stock. We estimate our operating expenses and working
capital requirements beginning September 30, 2008 and through September 30, 2008 to be as
follows:

Estimated Expenses
through September 30, 2008

|                                 | 
|-------------------------------- | 
|
|
|
|
|Product Research and Development | 
|                                 | 
|Sales and Marketing              | 
|                                 | 
|General and Administrative       | 
|                                 | 
|Capital Expenditures             | 
|                                 | 
|Tax Expenses                     | 
|                                 | 
|                                 | 
|Total                            | 

At
September 30, 2007, we had a working capital of $965,033. In accordance with our current
monthly expenses, this will satisfy our cash requirement only until September 30, 2008. In
such event that we do not generate revenues or raise sufficient additional funds by a
public offering or a private placement, we will consider alternative financing options, if
any, or be forced to scale down or perhaps even cease our operations.

13

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# Financial Condition,
Liquidity and Capital Resources

During
the three months ended September 30, 2007, we incurred a loss of $202,604, compared to a
net loss of $404,606 for the comparative period in 2006. During the nine months ended
September 30, 2007, we incurred a loss of $901,253, compared to a net loss of $835,168 for
the comparative period in 2006. During the nine months ended September 30, 2007, we
incurred $915,161 of operating expenses, comprised of $145,961 for research and
development costs, $258,664 for stock-based compensation expenses, $39,916 which is
included in the general and administrative cost for sales and marketing costs, $470,620
for general and administrative cost.

During
the nine months ended September 30, 2006, we incurred $839,838 of operating expenses,
comprising of $68,126 for research and development, $448,158 for stock-based compensation
expenses and $323,554 for general and administrative costs.

At
September 30, 2007, we had working capital of $965,033.

At September
30, 2007, our Company had total assets of $1,329,741, which consisted of cash and
equivalents, short term deposits and restricted cash of $1,042,044, fixed assets of
$82,813, intangible assets of $101,507 and prepaid expenses and other current and
non-current assets of $103,377.

At
December 31, 2006, we had working capital of $243,421.

At December
31, 2006, our Company had total assets of $581,259, which consisted of cash and
equivalents of $341,925, fixed assets of $75,533, intangible assets of $110,507 and
prepaid expenses and other current and non-current assets of $53,294.

We
had no significant revenues during the nine months ended September 30, 2007, and no
significant revenues from inception through September 30, 2007.

Going Concern

The
continuation of our business is dependent upon our raising additional financial support or
on our ability to create significant sales of our commercial products, the ACRO-P.E.T and
the ACRO N.E.T. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders. Obtaining
commercial or other loans, assuming those loans would be available, would increase our
liabilities and future cash commitments.

We
have historically incurred losses, and through September 30, 2007, we have incurred losses
of $2,453,668 since our inception. Because of these historical losses, we will require
additional working capital to develop our business operations.

There
are no assurances that we will be able to either (i) achieve a level of revenues adequate
to generate sufficient cash flow for operations; or (ii) obtain additional financing
through either private placement, public offerings and/or bank financing necessary to
support our working capital requirements. To the extent that funds generated from
operations and the last private placement are insufficient to meet our ongoing capital
requirements, we will have to raise additional working capital by means of private
placements, public offerings and/or bank financing. No assurance can be given that
additional financing will be available, or if available, will be on terms acceptable to
us. If adequate working capital is not available we may not increase our operations and if
we are unable to raise additional funds we may cease operations.

Management
believes that we have sufficient cash and working capital to support forecasted operating
results, capital expenditures and commitments through at least September 30, 2008. If such
available sources of cash are not sufficient, management has a plan to reduce expenses so
that it can continue to meet its obligations. However, the viability of Acro for a
significant period of time beyond September 30 , 2008 is dependent on its ability to
generate cash flow from future product sales or to obtain additional financing. The
financial statements do not include any adjustments that might result from the outcome of
this uncertainty.

14

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Product in Development

Our
first product called the Peroxide Explosives Tester (ACRO-P.E.T). ACRO-P.E.T is a small
disposable pen like probe which detects the presence of peroxide-based explosives using
three chemical solutions and relies on direct contact with the suspicious substance.
ACRO-P.E.T has been designed for rapid, on-site detection of peroxide-based explosives.
Its main advantages are high sensitivity, high selectivity, fast response, simple
operation, small size and cost effectiveness. In November 2006, we completed the first
production of the ACRO-P.E.T for evaluation by potential customers. We delivered these
products to several international security agencies for evaluation tests. We recently
developed a new version of ACRO-P.E.T, which enables easier verification of peroxide based
explosives, such as Triacetone Triperoxide (TATP). In addition, in the new version we
improved the sampling device that enables easy and immediate sampling of suspicious
liquids, in addition to all other forms of explosives, including powder. The new version
is expected to be available in the fourth quarter of 2007.

We
are currently starting to market a new device called ACRO-N.E.T., which detects the
presence of commercial and military explosives. ACRO-N.E.T. incorporates into our pen-like
device the technology of IIBRs explosives testing kit (ETK), licensed to us under
the agreement with LSRI. This new device ACRO- N.E.T., complements ACRO-P.E.T. We will
start marketing the ACRO-N.E.T during the fourth quarter 2007.

To
date, the data supporting our development programs is derived from laboratory and limited
trials. We cannot assure you that our ACRO-P.E.T and ACRO N.E.T will gain commercial
acceptance in the marketplace. We plan to follow ACRO-P.E.T and ACRO-N.E.T with additional
future products utilizing our proprietary technologies and public domain methods for
detecting other explosives.

# Off-Balance Sheet Arrangements

We
entered into non-cancellable operating leases agreements for vehicles and premises. We
have a commitment to pay a total of $68,415 for the duration of these lease agreements.

Item 3. Controls and
Procedures.

We
performed an evaluation of the effectiveness of our disclosure controls and procedures
that are designed to ensure that the material financial and non-financial information
required to be disclosed in our quarterly report and filed with the Securities and
Exchange Commission is recorded, processed, summarized and reported timely within the time
period specified in the SECs rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits under the
Securities Act, is accumulated and communicated to the issuers management, including
its principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure. Based
on our evaluation, our management, including our Chief Executive Officer and Chief
Financial Officer, have concluded that our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15(d)  15(e) of the Securities Exchange Act of 1934, as
amended) as of the end of the period covered by this report are effective at such
reasonable assurance level. There can be no assurance that our disclosure controls and
procedures will detect or uncover all failures of persons within our company to disclose
material information otherwise required to be set forth in our reports. Our disclosure
controls and procedures are designed to provide reasonable assurance of achieving the
desired control objectives.

15

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# PART II  OTHER
INFORMATION

# Item 1. Legal
Proceedings.

None.

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

None.

# Item 3. Defaults Upon
Senior Securities.

None.

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

None.

# Item 5. Other
Information.

N/A.

# Item 6. Exhibits

The following exhibits, required by
Item 601 of Regulation S-B, are being filed as part of this quarterly report, or are
incorporated by reference where indicated:

|(2) | Plan
of purchase, sale, reorganization, arrangement, liquidation or           succession
|--- | ----------------------------------------------------------------------------------------

|2.1 | Agreement
and Plan of Merger for the Merger of ACRO Inc. with and into Medina International Corp.,
dated April 25, 2006 (incorporated by reference from our current report on Form 8-K
filed May 4, 2006).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Articles
of Incorporation and By-laws
|--- | -------------------------------------

|3.1 | Articles
of Incorporation as amended (incorporated by reference to Exhibit 3.1 to our
         registration statement on Form SB-2 filed November  21, 2003).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | Bylaws
dated  February 25, 2005  (incorporated  by reference  from our current report on Form
8-K          filed March 21, 2005).
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|3.3 | Certificate
of Change Pursuant to NRS 78.209 filed with the State of Nevada effective as of January
25, 2006 (incorporated by reference to Exhibit 3.3 to our annual report on Form 10-KSB
filed March 28, 2007).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 | Certificate
of Change Pursuant to NRS 78.209 filed with the State of Nevada effective as of October
25, 2006 (incorporated by reference to Exhibit 3.4 to our annual report on Form 10-KSB
filed March 28, 2007).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.5 | Certificate
of Change Pursuant to NRS 78.209 filed with the State of Nevada effective as of October
30, 2006 (incorporated by reference to Exhibit 3.5 to our annual report on Form 10-KSB
filed March 28, 2007).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16

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|(10) | Material
Contracts
|---- | ------------------

|10.1 | Patent
Purchase  Agreement  between the Registrant and Prof. Ehud Keinan  (incorporated  by
reference from          our current report on Form 8-K filed February 3, 2006).
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Consulting
Agreement between the Registrant and BioTech Knowledge LLC (incorporated by reference
from our current report on Form 8-K filed February 3, 2006).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 | Letter
of Agreement between the Registrant and BioTech Knowledge LLC (incorporated by reference
from our current report on Form 8-K filed February 3, 2006).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 | Advisory
Board Agreement  between the Registrant and Mr. Ehud Barak  (incorporated by reference to
Exhibit          10.6 to our annual report on Form 10-KSB filed March 28, 2007).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 | Advisory
Board Agreement between the Registrant and Prof.  Richard Lerner  (incorporated by
reference from          our current report on Form 8-K filed September 5, 2006).
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 | Advisory
Board Agreement between the Registrant and Prof. K. Barry Sharpless, dated September
         28, 2006 (incorporated by reference to Exhibit 10.8 to our annual report on Form
10-KSB filed          March 28, 2007).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 | Finders
Agreement between the Registrant and Siden Investment Inc. dated February 1, 2007
         (incorporated by reference to Exhibit 10.9 to our annual report on Form 10-KSB
filed March 28,          2007).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 | Consulting
Agreement between Acrosec Ltd. And M.G NET Ltd., dated March 26, 2007 (incorporated
         by reference to Exhibit 10.10 to our annual report on Form 10-KSB filed March
28, 2007).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 | Services
Agreement between Acrosec Ltd. and the Registrant, dated March 7, 2007 (incorporated
         by reference to Exhibit 10.11 to our annual report on Form 10-KSB filed March
28, 2007).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 | Subscription
Agreement, dated February 13, 2007 (incorporated by reference to Exhibit 10.11 to our
quarterly report on Form 10-QSB filed May 15, 2007).
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 | Employment
Agreement between Acrosec Ltd. and Gabby Klausner, dated June 1, 2007 (incorporated by
reference to Exhibit 10.11 to our quarterly report on Form 10-QSB filed August 13, 2007).
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(31) | Section
302 Certification
|---- | -------------------------

|31.1 | Certification
of Principal Executive Officer
|---- | --------------------------------------------

|31.2 | Certification
of Principal Financial Officer and Principal Accounting Officer
|---- | -----------------------------------------------------------------------------

|(32) | Section
906 Certification
|---- | -------------------------

|32.1 | Certification
of Principal Executive Officer
|---- | --------------------------------------------

|32.2 | Certification
of Principal Financial Officer and Principal Accounting Officer
|---- | -----------------------------------------------------------------------------

17

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# SIGNATURES

In accordance with the requirements
of the Exchange Act, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|ACRO INC.By: /s/ Gadi Aner
Gadi Aner, Chief Executive Officer(Principal Executive Officer)Date: November 13, 2007
|-------------------------------------------------------------------------------------------------------------------------------

|By: /s/ Gabby Klausner
Gabby Klausner, Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)Date: November 13, 2007
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

18

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