|UNITED
      STATES                                                                         
|--------------------------------------------------------------------------------------------
|SECURITIES
      AND EXCHANGE COMMISSION                                                    
|WASHINGTON,
      D.C. 20549                                                                
|FORM 10-QSB                                                                                 
|                                                                                            
|[X]                                                                                         
|                                                                                            
|                                                                                            
|[ ]                                                                                         
|                                                                                            
|Commission
      file number000-50482                                                       
|                                                                                            
|ACRO INC.                                                                                   
|(Exact name of small business issuer as specified in its
      charter)                     
|                                                                                            
|Nevada                                                                                      
|(State or
      other jurisdiction of incorporation or organization)                        
|                                                                                            
|**18 Halevna Street, Timrat, Israel
      23840**                                           
|(Address of principal executive offices)                                                    
|                                                                                            
|**011 972 4 604
    0483**                                                                  
|(Issuers
      telephone number)                                                           
|                                                                                            
|**Medina International
      Inc.**                                                         
|(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 [ ]

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes [ ] No[X]

1

---

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 [ ] No [ ]

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:

32,288,006 common shares issued and
outstanding as at May 5, 2006

Transitional Small Business Disclosure
Format (Check one): Yes [ ] No [X]

PART I

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.

2

---

ACRO
Inc. (A Development Stage Company) (formerly Medina International Corp.)
and Subsidiary Financial Statements As at March 31, 2006
(Unaudited)

3

---

|ACRO Inc. (A
      Development Stage Company)    (formerly Medina International Corp.) and
      Subsidiary
|-----------------------------------------------------------------------------------------------------------
|
|                                                                                                           
|Interim
      Consolidated Balance Sheets                                                                  
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Assets                                                                                                     
|                                                                                                           
|Current
      assets:                                                                                      
|Cash and cash
      equivalents                                                                            
|Prepaid
      expenses                                                                                     
|Total current
      assets                                                                                 
|                                                                                                           
|Intangible assets,
      net                                                                               
|                                                                                                           
|Total
      assets                                                                                         
|                                                                                                           
|                                                                                                           
|Liabilities
      and stockholders (deficit) equity                                                       
|                                                                                                           
|Current
      liabilities:                                                                                 
|Accounts payable and
      accrued liabilities                                                             
|                                                                                                           
|Total current
      liabilities                                                                            
|                                                                                                           
|Stockholders
      (deficit) equity:                                                                      
|Common stock; $0.001 par
      value; 350,000,000 shares authorized;                                       
|32,288,006 and 21,000,000
      shares issued and outstanding as of March 31,                              
|2006                                                                                                       
|and December 31, 2005,
      respectively                                                                  
|Additional paid-in
      capital                                                                           
|Accumulated
      deficit                                                                                  
|Total
      stockholders (deficit) equity                                                                 
|                                                                                                           
|Total
      liabilities and stockholders (deficit) equity                                                 

See accompanying notes to the interim
consolidated financial statements

4

---

|ACRO Inc. (A
      Development Stage Company)    (formerly Medina International Corp.) and
      Subsidiary
|-----------------------------------------------------------------------------------------------------------
|
|                                                                                                           
|Interim
      Consolidated Statements of Operations                                                        
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Revenues                                                                                                   
|                                                                                                           
|Costs and
      expenses :                                                                                 
|Research and
      development                                                                             
|General and
      administrative                                                                           
|                                                                                                           
|Total
      operating expenses                                                                             
|                                                                                                           
|Operating
      loss                                                                                       
|                                                                                                           
|Interest income,
      net                                                                                 
|Other income,
      net                                                                                    
|                                                                                                           
|Net
      loss                                                                                             
|                                                                                                           
|                                                                                                           
|Basic and
      diluted net loss per common share                                                          
|                                                                                                           
|Weighted
      average shares used in computing basic                                                      
|and                                                                                                        
|diluted net
      loss per common share                                                                    

See accompanying notes to the interim
consolidated financial statements.

5

---

|ACRO Inc. (A
      Development Stage Company)    (formerly Medina International Corp.) and
      Subsidiary
|-----------------------------------------------------------------------------------------------------------
|
|                                                                                                           
|Interim
      Consolidated Statements of Cash Flows                                                        
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|                                                                                                           
|Cash flows
      from operating activities:                                                                
|Net
      loss                                                                                             
|Adjustments
      to reconcile net loss to net cash used in operating                                      
|activities:                                                                                                
|Depreciation and
      amortization                                                                        
|Changes in
      operating assets and liabilities:                                                         
|Decrease in prepaid
      expenses                                                                         
|Decrease in accrued
      payable                                                                          
|                                                                                                           
|Net cash used
      in operating activities                                                                
|                                                                                                           
|Cash flows
      from investing activities:                                                                
|Purchase of intangible
      assets                                                                        
|                                                                                                           
|Net cash used
      in investing activities                                                                
|                                                                                                           
|Cash flows
      from financing activities:                                                                
|Proceeds from sale common
      stock, net                                                                 
|                                                                                                           
|Net cash
      provided by financing activities                                                            
|                                                                                                           
|Net increase
      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 interim
consolidated financial statements.

6

---

ACRO Inc. (A Development Stage
Company)(formerly Medina International Corp.)
and Subsidiary



|**Statement of
      Stockholders Equity (Deficit) (Unaudited)**
|-----------------------------------------------------------------
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Inception, May 22, 2002                                          
|Sale of common stock for cash                                    
|Net loss for the period                                          
|Balance, December 31, 2002                                       
|                                                                 
|Services contributed by officers                                 
|Sale of common stock for cash                                    
|Offering costs                                                   
|Net loss for the year                                            
|Balance, December 31, 2003                                       
|                                                                 
|Net loss for the year                                            
|Balance, December 31, 2004                                       
|                                                                 
|Net loss for the year                                            
|Balance, December 31, 2005                                       
|                                                                 
|Issuance of Common Stock on January 19, 2006                     
|Issuance of Common Stock on March 7, 2006*                       
|Net loss for the period                                          
|Balance, March 31, 2006                                          

*Net of $99,031 issuance
expenses.

See accompanying notes to the interim
consolidated financial statements

7

---

ACRO Inc. (A Development Stage
Company)(formerly Medina International Corp.)
and Subsidiary

Notes to the Interim Consolidated
Financial Statements as of March 31, 2006

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 in
the controlling ownership and a private placement financing (see Note 5), the
Company abandoned the oil and gas consulting business and entered into the
homeland security market focusing mainly on the development and sale of products
for the detection of peroxide based explosives.

Since its inception, the Company has no
significant revenues and no material operations 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 Companys principal activities have
consisted of purchasing a patent; identify business opportunities and raising
capital through the sale of its securities. The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. The Company has net losses for the period from inception (May 22, 2002)
through March 31, 2006 of

$ 310,226. The Companys inability to
raise additional capital over the next several months on terms and within an
acceptable timeframe could force the Company to dramatically reduce its
expenses, delay, scale back, or eliminate certain of its planned activities and
operations, including its research and development activities, any of which
could have a material adverse effect on the Companys business, financial
condition and results of operations.

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. Interim Consolidated Balance Sheet
information as of December 31, 2005 has been audited and was obtained from the
Companys annual Report on form 10-KSB for the year ended December 31,
2005.

The accompanying unaudited interim
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, 2005. The results of operations for the
period ended March 31, 2006 are not necessarily indicative of the results that
may be expected for the entire fiscal year or any other interim
period.

8

---

ACRO Inc. (A Development Stage
Company)(formerly Medina International Corp.)
and Subsidiary

Notes to the Interim Consolidated
Financial Statements as of March 31, 2006

Note 2 - Summary of Accounting Policies
(contd)

B. Use of estimates in the preparation
of financial statements

The preparation of the financial
statements in conformity with U.S. 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 Israeli subsidiary Percival Ltd. All
material intercompany transactions and balances have been eliminated in
consolidation. The functional currency of the Israeli subsidiary is the U.S.
dollar. Foreign exchange transaction gain and losses are included in
income.

D. Cash equivalents

The company considers all short term,
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.

E. Reclassifications

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

F. Recent accounting
pronouncement

In December 2004, the FASB issued
Statement No. 123(R) Share-Based Payment. This statement requires that
stock-based compensation be recognized as a cost in the financial statements and
that such cost be measured based on the fair value of the stock-based
compensation. As of January 1, 2006 the Company has adopted this statement. As
of March 31, 2006, no stock-based awards have been granted. As a result, the
Company has incurred no stock-based compensation expenses for the reported
period.

Note 3 - Other
Assets

In March 2006, the Company purchased a
patent from Ehud Keinan (Keinan), a stockholder who holds 32.9% of the
Companys common shares, for $ 120,000. The patent is being amortized over the
life of the asset which is estimated at 10 years.

9

---

ACRO Inc. (A Development Stage
Company)(formerly Medina International Corp.)
and Subsidiary

Notes to the Interim Consolidated
Financial Statements as of March 31, 2006

Note 4 - Loss Per
Share

We compute basic loss per share by
dividing net loss by the weighted average number of common shares outstanding
during the respective period; after giving retroactive effect to the stock split
that occurred during January 2006 (see Note 5). Warrants to purchase 1,188,000
shares of common stock, issued in March 2006 at an exercise price of $ 1.50 per
share, were excluded from the computation of diluted net loss per share for the
applicable three months ended March 31, 2006, because such warrants were
anti-dilutive as we incurred a loss in this period, no warrants were outstanding
as of March 31, 2005.

Note 5 - Stock
Transactions

On January 25, 2006, the Company conducted
a seven for one forward stock split of its authorized and outstanding shares of
common stock. As a result, the authorized capital was increased from 50,000,000
to 350,000,000 shares of common stock. The stock split did not vary the par
value of the common stock. All stock figures have been retroactively restated to
reflect the stock split.

On January 19, 2006, the Company closed a
private placement (the January 2006 Private Placement) consisting of
10,100,006 shares of common stock for total gross proceeds of approximately $
43,286 in the form of a promissory note payable upon demand. The promissory note
was paid in full in March 2006. In addition, pursuant to a share purchase
agreement, two of the Companys existing stockholders sold their entire
interests in the Company to a new stockholder who also participated in the
January 2006 Private Placement, resulting in a change in controlling stockholder
ownership.

On March 15, 2006, the Company closed a
second private placement (the March 2006 Private Placement) for a gross
proceeds of $ 1,188,000, less issuance cost of $ 99,031, consisting of 1,188,000
shares of common stock, together with warrants to purchase 1,188,000 shares of
common stock at an exercise price pf $ 1.50 per share, exercisable until March
15, 2008.

Note 6 - Related Party
Transactions

In February 2006, the Company entered into
a consulting services agreement (the Consulting Agreement) with a limited
liability company owned by Keinan (see Note 3), whereby Keinan has agreed to
provide consulting services for a 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 period ending March 31, 2006, the Company incurred $
3,000 for the consulting services provided by Keinan.

During the three month period ending March
31, 2006, the Company incurred $ 5,000 for consulting services provided by the
Companys Chairman of the Board of Directors.

The Company is currently using the address
of the Chairman of the Board, on a rent-free basis, as its principle executive
offices. There is no written lease agreement or other written contract for the
use of his premises.

10

---

ACRO Inc. (A Development Stage
Company)(formerly Medina International Corp.)
and Subsidiary

Notes to the Interim Consolidated
Financial Statements as of March 31, 2006

Note 7 - Subsequent
Events

Subsequent to the balance sheet date, the
Company engaged a new consultant that will serve on the advisory board member
which will get a grant of 83,333 restricted shares for each quarter that the
member will continue to provide services to the Company.

11

---

Item 2. Managements Discussion and
Analysis and 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, including the risks in the section entitled Risk 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$) and are prepared in accordance with United States
Generally Accepted Accounting Principles. In this quarterly report, unless
otherwise specified, all dollar amounts are expressed in United States dollars.
All references to CDN$ refer to Canadian dollars and all references to common
shares refer to the common shares in our capital stock.

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

General

Corporate Overview and
History

We were incorporated under the laws of the
State of Nevada on May 22, 2002 under the name 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 corporation that we
had formed specifically for this purpose. Our principal executive and head
offices are located at 18 Halevna Street, Timrat, Israel 23840.

Since our inception our business has been
to provide professional consulting services for the technical and economic
evaluation of petroleum and natural gas resources. The primary services that we
offered was conducting due diligence on petroleum and natural gas projects,
identifying potential petroleum and natural gas projects available for
acquisition by clients and the provision of professional services to petroleum
and natural gas clients primarily in the technical areas of geology, geophysics
and petroleum engineering. In order to have achieved the goal of offering those
services at the standard we were aiming for, we should have retained a strong
database of highly experienced consultants. We were not successful in retaining
such consultants because of a lack of money and the difficulties involved in
recruiting and hiring such qualified individuals.

We were not successful in fully
implementing our initial business plan for the consulting services have decided
to no longer offer consulting services to oil and gas companies. To better
protect stockholder interests and provide future appreciation, management have
conducted an in-depth analysis of our business and decided to find a product
that we will be able to develop and license or sell. The product that we have
found is a method of detecting peroxide based explosives.

Accordingly, on February 1, 2006, we
announced that we had signed a patent purchase agreement with Dr. Ehud Keinan.
The U.S. Patent No. 6,767,717 describes an invention that provides a method of
detection of peroxide based explosives. Through a consulting services agreement
that we signed at the same time, Dr. Ehud Keinan, the inventor of the method
described in the patent, has agreed to provide consulting services to us in
order to develop the patent into a commercially viable product.

From our inception until the decision to
abandon the consulting services business on February 1, 2006, we have offered
consulting services to oil and gas companies in Canada and the United States. As
of March 31, 2006,

12

---

we did not realize any significant
revenues from operations. Our principal activities consisted of raising capital
through the sale of its securities.

Our Current
Business

With the completion of the Patent Purchase
Agreement to acquire U.S. Patent No. 6,767,717, we changed our current mission
to leverage our technology in the field of explosive detection devices, to
commercialize a series of products for accurate and immediate detection of
explosives and other suspected substances such as drugs of abuse, biological
contamination and others.

Description of
Property

We are currently using the office and
business premises of one of our directors, Gadi Aner, in Timrat, Israel, on a
rent-free basis. The business premises consist of a single office. There is no
written lease agreement or other written contract for the space use.

Competition

We will be competing with other developers
and manufacturers of explosive detection device. Several corporate announcements
have recently appeared in the media about efforts to develop devices that detect
TATP. Most of these devices are based on air-sampling followed by spectral
analysis using various methods. These instruments, which are quite heavy and
expensive, are designed primarily for checkpoint stations, such as airports.
Nevertheless, to the best of our knowledge, none of them can compete with our
potential peroxide based explosive detection device, which is a small,
disposable device, portable, easy to operate for quick analysis by anybody at
any location. Another relevant development that has recently been introduced to
the explosives detection market is a multipurpose portal, which is already in
use at major airports. The leading company in this market is GE.

Intellectual
Property

Our success will depend in part on our
ability, and the ability of our future licensees, to obtain patent protection
for our technology and processes we acquired under the Patent Purchase Agreement
from Dr. Ehud Keinan. Under the Patent Purchase Agreement, we own the technology
covered by United States Patent No. 6,767,717 issued on July 27,
2004.

The U.S. Patent No. 6,767,717 relates to
the method for the detection of explosives. The intellectual property covered by
U.S Patent No. 6,767,717 describes a method of detecting a peroxide-based
explosive in a sample suspected of consisting of or comprising such explosive,
which method comprises dissolving said sample in a suitable organic solvent,
contacting the solution with an aqueous solution of a strong acid capable of
decomposing said explosive to release hydrogen peroxide, and contacting the
resulting mixture with a peroxidase enzyme.

Governmental Approval and Effect of
Regulations

It is not expected that specific
regulatory approval will be required before our potential explosive detection
devices are brought into the market. The first solution contained in our
prototype PET product is a strong acid. It is corrosive but not toxic when
diluted. The other two solutions used in our prototype PET product are
non-toxic. Since all three solutions in our prototype PET product are stored in
close compartments inside the device, there is no chance of users touching any
of them during the test. Upon mixing all three solutions, the resultant mixture
is no longer acidic, it is non-toxic, is of no biological hazard. Therefore, the
used apparatus can be discarded in any trash can.

We plan to work with governmental bodies,
such as the Technical Support Working Group in the US and other government
agencies, to ensure that our products meet their specific requirements. The
Technical Support Working Group is a US national forum that identifies,
prioritizes, and coordinates interagency and international research and
development requirements for combating terrorism. The Technical Support Working
Group assists to develop technologies and equipment to meet the high priority
needs of the combating terrorism community, and addresses joint international
operational requirements through cooperative research and development. Israel is
a designated partner of the Technical Support Working Group.

13

---

PRODUCTS

We are currently developing and testing a
prototype of our first product called the Peroxide Explosives Tester or PET. PET
is a small pen like probe, included in a mobile kit for determining the presence
of peroxide-based explosives using three chemical solutions and relies on direct
contact with the suspicious substance. PET has 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. We anticipate that PET may be launched in the year ending
December 31, 2006. However, we cannot assure you that our development and
testing of PET will be successful or that PET will gain commercial acceptance in
the marketplace.

The PET prototype is a small, pen like
device (Figure 1) a sample is collected or swiped with a silicone rubber based
test pad, which is reinserted into the device. If TATP is present, the resulting
solution turns a green-blue color. Even trace amounts will provide a suitable
indication.

We plan to follow PET with additional
future products utilizing our proprietary technologies and public domain methods
for detecting other explosives. These products are expected to
include:

Air Sampling a sniffer device for detecting explosives in the air, not
only on direct contact, for integration in explosive detection systems to give
them TATP screening capability.

Multi-Test a version of the PET, making mass screening for TATP
possible.

Multi-Substance kits combining peroxide detection with testing for other
explosive materials.

Additional Substances applying both the contact and sniffer technologies for
portable kits for detecting drugs, contamination and other illicit
substances.

The Multi-Test version will be based on
the same chemistry with one significant difference, that the three solutions
will be released from large dispensers rather than from one-time ampoules.
Availability of the multi-test PET will enable the graduation of the PET from a
single use device for testing items which have been identified as suspicious to
a system that can be used to routinely check large numbers of people or objects,
thereby providing highly effective screening.

With marginal additional cost per check,
the Multi-Test PET will be useable in high volume locations such as airports and
other mass transport sites. It will also be applicable to checking staff and
others entering factories,

14

---

airports and other sensitive locations,
where security is a main priority, but where 100% screening is impractical using
current methods.

Research and
Development

Our companys research and development
efforts will be focused on enhancing our potential explosive detection products,
including the periodic redesign of products and the incorporation of new
technologies to improve the performance and design of new product lines and the
expansion and adaptation of existing prototype PET product. Our company will
conduct all of the research and development of our products. During the next 12
months to March 15, 2007, we anticipate spending approximately $449,000 on
research and development.

Employees

We currently have three employees,
consisting of our Chairman of the Board, Mr. Gadi Aner, our Chief Executive
Officer, Yami Tarsi, and our Acting Chief Financial Officer, Jacob Bar-Shalom.
We may hire an additional three employees over the next 12 month period,
including a Chief Operating Officer, Technician, Technical Designer, Sales Agent
and Manager and other administrative staff. We plan to outsource contract
employment as needed.

We have entered into a Consulting Services
Agreement with BioTech Knowledge LLC, a company wholly owned by Dr. Keinan. We
will pay BioTech Knowledge LLC a monthly fee of $3,000 for consulting services
to be provided by Dr. Keinan to our company.

Purchase or Sale of
Equipment

We do not intend to purchase any
significant equipment over the twelve months ending March 31, 2007.

Recent Sales of Unregistered
Securities

On January 19, 2006, we closed a private
placement consisting of 1,442,858 shares (10,100,006 shares post-split) of our
common stock at a pre-split price of $0.03 per share (for gross proceeds of
$43,285.74) . We received promissory notes for the full amount, payable upon our
demand. We issued the securities to eight (8) non-U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of
1933 and to one (1) U.S. Accredited Investor (as this term is defined in
Regulation D under the 1933 Act). On March 21, 2006, we demanded payment on the
promissory notes and received full proceeds of $43,285.74.

On March 15, 2006, we completed a private
placement for $1,188,000 by issuing 1,188,000 units of our securities at $1.00
per unit, with each unit comprising one share of our common stock and one share
purchase warrant to purchase one share of our common stock at the price of $1.50
per share. We paid a finders fee in cash equal to 8% on $1,100,000 of the
proceeds raised to two finders.

Plan of Operation

Our primary objectives over the 12 months
ending March 31, 2007, will be to develop and commercialize the detection device
for peroxide based explosive using the intellectual property covered in U.S.
Patent No. 6,767,717. Pursuant to the consulting agreement Dr. Keinan, the
inventor of the detection device described in the Patent, will provide us with
consultant services and will continue to work on the development of the product
into a marketable device.

Cash
Requirements

For the next 12 months we plan to expend a
total of approximately $1,439,000 in implementing our new business plan of
developing and commercializing out potential explosive detection devise. We will
be obligated to pay BioTech Knowledge LLC, a wholly owned company of Dr. Keinan,
$3,000 per month for consulting services to be provided by Dr. Keinan. There are
no assurances that we will be able to obtain the amount required for our
continued operations. In such event that we do not raise sufficient additional
funds by secondary offering or private placement, we will consider alternative
financing options, if any, or be forced to scale down or perhaps even cease our
operations.

15

---

Financial Condition, Liquidity and
Capital Resources

During the three month period ended March
31, 2006, we incurred a loss of $109,394, compared to a net loss of $49,214 for
the comparable period in 2005. No revenue was generated in 2006 or 2005. During
2006, we incurred $110,499 of operating expenses, comprising primarily of
$22,013 for research and development costs, $48,302 for legal costs, $20,000 for
the audit of our December 31, 2005 financial statements and for the review of
our March 31, 2006 financial statements by our independent auditor and $17,800
for professional services costs incurred to identify business opportunities for
us.

In 2005, we incurred $157,665 of operating
expenses, comprising primarily of $139,905 for due diligence services and
$11,010 for accounting and administrative services.

At March 31, 2006, we had a working
capital of $845,573.

At March 31, 2006, our company had total
assets of $965,080, which consisted mainly of cash of $845,573 and intangible
assets of $119,507.

At March 31, 2006, our companys total
liabilities were $39,060.

We had no revenues in the three months
ended March 31, 2006, and no revenues since inception to March 31, 2006 . We do
not expect to purchase or sell any significant equipment. We do not expect any
significant changes in the number of our employees.

Going Concern

The continuation of our business is
dependent upon us raising additional financial support. 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, will increase our liabilities
and future cash commitments.

We have historically incurred losses, and
through March 31, 2006 have incurred losses of $310,226 from 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 (1) achieve a level of revenues adequate to generate sufficient
cash flow for operations; or (2) 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 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.

These conditions raise substantial doubt
about our ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might be necessary should we be unable to continue as a going
concern.

Our independent auditors report on our
audited financial statements, in our Form 10-KSB for the fiscal year ended
December 31, 2005, contained a going concern qualifier. The qualifier
explanatory paragraph contained in their audit report should be read in
connection with our managements discussion of our financial condition,
liquidity and capital resources.

OFF-BALANCE SHEET
ARRANGEMENTS

We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
is material to stockholders.

16

---

APPLICATION OF CRITICAL ACCOUNTING
POLICIES

Our unaudited financial statements and
accompanying notes have been prepared in conformity with generally accepted
accounting principles in the United States of America for interim financial
statements. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenue, and expenses. These estimates and assumptions are affected by
managements application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the
following aspects of our financial statements is critical to an understanding of
our financials.

The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the balance sheet. Actual
results could differ from those estimates.

Basic loss per share has been calculated
based on the weighted average number of shares of common stock outstanding
during the period.

Our company does not expect the adoption
of recently issued accounting pronouncements to have a significant impact on our
results of operations, financial position or cash flow.

RISK FACTORS

Much of the information included in this
quarterly report includes or is based upon estimates, projections or other
forward-looking statements. Such forward-looking statements include any
projections or estimates made by us and our management in connection with our
business operations. While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions, or other future performance suggested herein. We undertake no
obligation to update forward-looking statements to reflect events or
circumstances occurring after the date of such statements.

Such estimates, projections or other
forward-looking statements involve various risks and uncertainties as outlined
below. We caution readers of this quarterly report that important factors in
some cases have affected and, in the future, could materially affect actual
results and cause actual results to differ materially from the results expressed
in any such estimates, projections or other forward-looking statements. In
evaluating us, our business and any investment in our business, readers should
carefully consider the following factors.

Our common shares are considered
speculative during the development of our new business operations. Prospective
investors should consider carefully the risk factors set out below.

Risks Relating to Our
Business

Our independent auditors have
expressed substantial doubt about our ability to continue as a going
concern.

We incurred net losses of $157,665 for the
year ended December 31, 2005 and $21,497 for the year ended December 31, 2004.
On December 31, 2005, we had cash of $2,002. We anticipate that we will require
up to approximately $1,439,000 to fund the implementation of our new business
plan and research and development for our potential explosive detection products
for the next 12 month period. Although we intend to raise the money required to
fund our operations during this period of time from the sale of our equity
securities, there can be no assurance that we will be able to do so. These
circumstances caused our independent auditors to include an explanatory
paragraph in their report dated March 2, 2006, regarding their concerns about
our ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our independent auditors.

If we are unable to obtain
additional funding our business operations will be harmed and if we do obtain
additional financing our then existing shareholders may suffer substantial
dilution.

We will require in excess of $1,439,000 in
additional funds to sustain and develop our potential explosive detection
products. Additional capital will be required to effect these operations and to
otherwise implement our overall business strategy. There can be no assurance
that financing will be available in amounts or on terms

17

---

acceptable to us, if at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional
financing, we will likely be required to curtail our plans and possibly cease our operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.

We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have no history of revenues from operations and have no significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. We have only recently
completed our acquisition of U.S. Patent No. 6,767,717 and our company has no operating history in the business of research and development of explosive detection device. Accordingly, we must be considered in the development stage. Our success is
significantly dependent on a successful development and commercialization of our potential explosive detection products. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties
arising from the absence of a significant operating history. We may be unable to develop a useful explosive detection device or achieve commercial acceptance of our potential explosive detection device or operate on a profitable basis. We are in the
development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or
all of their investment in our company.

We have acquired rights to certain patented intellectual property; however, we may not be successful in developing or marketing commercially viable products incorporating the intellectual property, which could add
expense and delay operations.

We only recently acquired U.S. Patent No. 6,767,717 and its related technology for our potential explosive detection products but have not yet commercially exploited such intellectual property through the development of
final products. We may never be able to develop or market products incorporating the intellectual property.

There is uncertainty over whether intellectual property we acquired infringes on the rights of third parties, which could add expense and delay operations.

We recently acquired U.S. Patent No. 6,767,717 from Dr. Ehud Keinan for $120,000. While Dr. Keinan has represented to us that, to the best of his knowledge, the explosive detection technology covered by the Patent does
not infringe on the rights of any third party, neither Dr. Keinan nor our company undertook a formal patent search or other investigation as to whether the detection technology infringes on the rights of any third party. In the event it is
ultimately found that this technology does infringe on the rights of a third party, we may be prohibited from developing or marketing products incorporating the technology and we may be liable for damages to the third party upon whose technology we
may have infringed.

We may be unable to protect our proprietary rights, thereby permitting competitors to develop the same or similar products and technologies to ours, which could add expense and delay operations.

Our future results and ability to compete will be dependent, in large part, upon the marketing and sales of our proprietary potential products and technologies, the development of future proprietary products and
technologies and the commercialization of purchased patented technologies. While we have received a U.S. patent covering certain of aspects of our potential explosive detection products, the patent may be successfully challenged and will not
provided us with meaningful proprietary protections or that we may not have the financial resources to mount sustained patent defense. We could also incur substantial costs in asserting our intellectual property or proprietary rights against others
or if others assert their rights against us. The failure to successfully protect our intellectual property and proprietary rights could enable others to duplicate or claim rights to our potential explosive detection products or otherwise develop
similar or competitive products which may result in decreases in our future results of operations, liquidity and cash flows. Any such decreases may correspondingly decrease the market price of our common stock.

We face severe competition from other explosive detection companies, many of whom have greater resources than we do, which could cause us to lose sales add expense and delay our operations.

We will have to compete against companies that are also in the development, manufacturing and sales of explosive detection devices. We may be unable to effectively compete in the marketplaces in which we plan to

18

---

operate. There are several other explosive detection providers that have significant inroads to the market sector. There are also government compliance issues that certain of our competitors in this field have already
overcome.

Our principal research and development facilities will be located in Israel and the unstable military and political conditions of Israel may cause interruption or suspension of our business operations without
warning.

Our principal research and development facilities will be located in Israel. As a result, we will be directly influenced by the political, economic and military conditions affecting Israel. Since the establishment of the
State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors and, since September 2000, involving the Palestinian population, and a state of hostility, varying in degree and intensity, has led to
security problems in Israel. Acts of random terrorism periodically occur which could affect our operations or personnel.

In addition, Israeli-based companies and companies doing business with Israel, have been the subject of an economic boycott by members of the Arab League and certain other predominantly Muslim countries since Israels
establishment. Although Israel has entered into various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in connection with efforts to resolve some of the economic and political problems
in the Middle East, we cannot predict whether or in what manner these problems will be resolved. Also, since the end of September 2000, there has been a marked increase in the level of terrorism in Israel, which has significantly damaged both the
Israeli economy and levels of foreign and local investment.

Furthermore, if we employ officers or employees in the Israel in the future, they may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military duty at
any time. All Israeli male citizens who have served in the army are subject to an obligation to perform reserve duty until they are between 45 and 54 years old, depending upon the nature of their military service.

Because our officers and some of our directors are located in non-U.S. jurisdictions, you may have no effective recourse against the management for misconduct and may not be able to enforce judgement and civil
liabilities against our officers, directors, experts and agents.

Our officers, including Messrs. Gadi Aner, Yami Tarsi and Mr. Jacob Bar-Shalom and some of our directors are nationals and/or residents of countries other than the United States, and all or a substantial portion of their
assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability
provisions of the securities laws of the United States or any U.S. state.

Investors interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity
securities.

Our Certificate of Incorporation authorizes the issuance of 350,000,000 shares of common stock. Our board of directors has the authority to issue additional shares up to the authorized capital stated in the certificate of
incorporation. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to obtain additional financing in the future. The issuance of any such shares may result in a reduction of the book value or
market price of the outstanding shares of our common stock. It will also cause a reduction in the proportionate ownership and voting power of all other stockholders. Further, any such issuance may result in a change of control of our
company.

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and
reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or
officers.

19

---

Our by-laws do not contain
anti-takeover provisions which could result in a change of our management and
directors if there is a take-over of our company.

We do not currently have a shareholder
rights plan or any anti-takeover provisions in our by-laws. Without any
anti-takeover provisions, there is no deterrent for a take-over of our company,
which may result in a change in our management and directors.

Risks Associated With Our Common
Stock

There is no active trading market
for our common stock and if a market for our common stock does not develop, our
investors will be unable to sell their shares.

There is currently no active trading
market for our common stock and such a market may not develop or be sustained.
Shares of our common stock are eligible for quotation on the National
Association of Securities Dealers Inc.s OTC Bulletin Board but there has been
no trade in our common stock. We cannot provide our investors with any assurance
that a public market will materialize. Further, the OTC Bulletin Board is not a
listing service or exchange, but is instead a dealer quotation service for
subscribing members. If our common stock is not quoted on the OTC Bulletin Board
or if a public market for our common stock does not develop, then investors may
not be able to resell the shares of our common stock that they have purchased
and may lose all of their investment. If we establish a trading market for our
common stock, the market price of our common stock may be significantly affected
by factors such as actual or anticipated fluctuations in our operation results,
general market conditions and other factors. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that
have particularly affected the market prices for the shares of developmental
stage companies. As we are a development stage company such fluctuations may
negatively affect the market price of our common stock.

Because we do not intend to pay any
dividends on our common stock, investors seeking dividend income or liquidity
should not purchase shares of our common stock.

We have not declared or paid any dividends
on our common stock since our inception, and we do not anticipate paying any
such dividends for the foreseeable future. Investors seeking dividend income or
liquidity should not invest in our common stock.

Our stock is a penny stock. Trading
of our stock may be restricted by the SECs penny stock regulations and the
NASDs sales practice requirements, which may limit a stockholders ability to
buy and sell our stock.

Our stock is a penny stock. The Securities
and Exchange Commission has adopted Rule 15g-9 which generally defines penny
stock to be any equity security that has a market price (as defined) less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to
certain exceptions. Our securities are covered by the penny stock rules, which
impose additional sales practice requirements on broker-dealers who sell to
persons other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

20

---

In addition to the penny stock rules
promulgated by the Securities and Exchange Commission, the NASD has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the NASD believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock.

Item 3. Controls and
Procedures.

As required by Rule 13a-15 under the
Exchange Act, we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures as of March 31, 2006,
being the end of the period covered by this quarterly report. This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer, Mr. Yami Tarsi, and Chief Financial Officer, Mr. Jacob
Bar-Shalom. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting management to material information relating to us
required to be included in our periodic SEC filings as at the end of the period
covered by this report. There have been no changes in our internal controls or
in other factors that could significantly affect internal controls subsequent to
the date we carried out our evaluation.

Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information
required to be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
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 in our reports filed under the Exchange Act
is accumulated and communicated to management, including our Chief Executive
Officer and our Chief Financial Officer, to allow timely decisions regarding
required disclosure.

During our most recently completed fiscal
quarter ended March 31, 2006 there were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to
affect, our internal control over financial reporting.

The term internal control over financial
reporting is defined as a process designed by, or under the supervision of, our
principal executive and principal financial officers, or persons performing
similar functions, and effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:

(a) Pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and
dispositions of our assets;

(b) Provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of our company are being made only in accordance with
authorizations of our management and directors; and

(c) Provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial
statements.

PART II - OTHER
INFORMATION

Item 1. Legal
Proceedings.

We know of no material, active or pending
legal proceedings against us, nor are we involved as a plaintiff in any material
proceedings or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder
are an adverse party or has a material interest adverse to us.

21

---

Item 2. Recent Sales of Unregistered
Securities and Use of Proceeds

On January 19, 2006, we closed a private
placement consisting of 1,442,858 shares (10,100,006 shares post-split) of our
common stock at a pre-split price of $0.03 per share for gross proceeds of
$43,285.74. We received promissory notes for the full amount, payable upon our
demand. We issued the securities to eight (8) non-U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of
1933 and to one (1) U.S. Accredited Investor (as this term is defined in
Regulation D under the 1933 Act).

On March 15, 2006, we completed a private
placement for $1,188,000 by issuing 1,188,000 units of our securities at $1.00
per unit, with each unit comprising one share of our common stock and one share
purchase warrant to purchase one share of our common stock at the price of $1.50
per share. We paid a finders fee in cash equal to 8% on $1,100,000 of the
proceeds raised to two finders.

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:

|(3)  | Articles of
      Incorporation and By-laws                                                                                                             
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                         
|3.1  | Articles of Incorporation
      as amended (incorporated by reference from 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 17, 2005 and March 21, 2005).     
|     |                                                                                                                                                         
|(10) | Material
      Contracts                                                                                                                                

|10.1 | Finders Fee Agreement between
      the Registrant and David Sidoo dated March 8, 2005 (incorporated by
      reference from our current report on Form 8-K filed March 17, 2005 and
      March 21, 2005).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|10.2 | 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).                                  
|    
|10.3 | Consulting Agreement between the
      Registrant and BioTech Knowledge LLC (incorporated by reference from our
      current report on Form 8-K filed February 3, 2006).                                   
|    
|10.4 | 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).                                    
|    
|10.5 | Employment Agreement between the
      Registrant and Yami Tarsi (incorporated by reference from our current
      report on Form 8-K filed May 12, 2006).                                                  
|    

22

---

|(14) | Code of
      Ethics                                                                                                                                                                                    
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                         
|14.1 | Code of Business Conduct
      and Ethics and Compliance Program (Incorporated by reference from
      our Form 10-KSB for the year ended December 31,
      2004, filed on March 30, 2005).            
|     |                                                                                                                                                                                                         
|(16) | Letter on
      Change in Certifying Accountant                                                                                                                                                         
|     |                                                                                                                                                                                                         
|16.1 | Letter dated March 6, 2006
      from Wheeler Wasoff, P.C. regarding change in independent
      accountant (incorporated by reference from our
      current report on Form 8-K/A filed March 6, 2006).
|     |                                                                                                                                                                                                         
|(21) | Subsidiaries                                                                                                                                                                                            
|     |                                                                                                                                                                                                         
|21.1 | Percival Ltd.,
      Israel                                                                                                                                                                             
|     |                                                                                                                                                                                                         
|(31) | Section 302
      Certification                                                                                                                                                                         
|     |                                                                                                                                                                                                         
|31.1 | Rule 13a-14(a)
      Certification of Principal Executive Officer and Principal Financial
      Officer.                                                                                                
|     |                                                                                                                                                                                                         
|(32) | Section 906
      Certification                                                                                                                                                                         
|     |                                                                                                                                                                                                         
|32.1 | Certification of Principal
      Executive Officer and Principal Financial Officer Pursuant to 18
      U.S.C. Section 1350, as Pursuant to Section 906
      of the Sarbanes-Oxley Act of 2002.        
|     |                                                                                                                                                                                                         
|(99) | Additional
      Exhibits                                                                                                                                                                               
|     |                                                                                                                                                                                                         
|99.1 | Stamped Certificate of
      Change Pursuant to NRS 78.209 filed with the State of Nevada (incorporated
      by reference from our current report on Form
      8-K/A filed February 13, 2006).        
|     |                                                                                                                                                                                                         
|(31) | Section 302
      Certification                                                                                                                                                                         

|31.1 | Certification of Yami
      Tarsi      
|---- | ---------------------------------------
|    
|31.2 | Certification of Jacob
      Bar-Shalom
|    

(32)       Section 906
Certification

|32.1 | Certification of Yami
      Tarsi      
|---- | ---------------------------------------
|    
|32.2 | Certification of Jacob
      Bar-Shalom
|    

23

---

SIGNATURES

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

ACRO INC.

|By: | /s/ Yami
      Tarsi                                                
|--- | --------------------------------------------------------------------
|    | Yami Tarsi, Chief
      Executive Officer                           
|    | (Principal Executive
      Officer)                                 
|    | Date: May 17,
      2006                                            
|   
|By: | /s/ Jacob
      Bar-Shalom                                          
|    | Jacob Bar-Shalom, Acting
      Chief Financial Officer              
|    | (Principal Financial
      Officer and Principal Accounting Officer)
|    | Date: May 17,
      2006                                            

Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

|By: | /s/ Yami
      Tarsi                                   | 
|--- | ------------------------------------------------------ | 
|    | Yami Tarsi, Chief
      Executive Officer             
|    | Date: May
      17, 2006                               | 
|   
|By: | /s/ Jacob
      Bar-Shalom                            
|    | Jacob Bar-Shalom, Acting
      Chief Financial Officer
|    | Date: May
      17, 2006                               | 

24

---