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

# FORM 10-KSB

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

For
the fiscal year ended December 31, 2006.

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
          1934

For
the transition period from o to o

Commission file number:
000-50482

ACRO INC. (Name of Small Business
Issuer in Its Charter)

|Nevada
(State or Other Jurisdiction of Incorporation or
Organization)
37 Inbar St., Caesarea, Israel 
(Address of principal executive offices) | 98-0377767
(I.R.S. Employer Identification No.)
30889
(Zip Code)
|---------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------

+972-4-636-0297 
(Issuers
telephone number, including area code)

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

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

Check whether the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act o

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

Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. o

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

Yes o No x



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Issuer's revenues for its most recent fiscal year. None

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 March 23, 2007, is $61,761,077

The number of shares outstanding of
the issuers common stock, as of March 23, 2007:67,131,686

# DOCUMENTS INCORPORATED
BY REFERENCE: NONE

Transitional
Small Business Disclosure Format (Check one):

Yes o No x

2

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# ACRO INC. 
ANNUAL REPORT ON FORM
10-KSB 
TABLE OF CONTENTS

|           |                                                                                                 |   
|---------- | ----------------------------------------------------------------------------------------------- | --
|
|
|
|
|PART I     |                                                                                                 |   
|ITEM 1.    | DESCRIPTION OF BUSINESS                                                                         | 4 
|ITEM 2.    | DESCRIPTION OF PROPERTY                                                                         | 11
|ITEM 3.    | LEGAL PROCEEDINGS                                                                               | 11
|ITEM 4.    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                             | 12
|          
|PART II   
|ITEM 5.    | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER TRANSACTIONS, AND SMALL                          
|           | BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES                                                  | 12
|ITEM 6.    | PLAN OF OPERATION                                                                               | 13
|ITEM 7.    | FINANCIAL STATEMENTS                                                                            | 17
|ITEM 8.    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE            | 18
|ITEM 8A.   | CONTROLS AND PROCEDURES                                                                         | 18
|          
|PART III  
|ITEM 9.    | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE                        
|           | GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                                   | 18
|ITEM 10.   | EXECUTIVE COMPENSATION                                                                          | 22
|ITEM 11.   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS | 23
|ITEM 12.   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                       | 24
|ITEM 13.   | EXHIBITS                                                                                        | 25
|ITEM 14.   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                          | 25
|          
|SIGNATURES

3

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# PART I

# Item 1. Description of
Business

Certain
statements in this Annual Report on Form 10-KSB are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Securities Exchange Act of 1934, as
amended (the Exchange Act). These statements involve a number of risks,
uncertainties and other factors that could cause our actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking statements. Factors which could
materially affect such forward looking statements can be found in the Section entitled
Risk Factors in Item 1 in this Annual Report on Form 10-KSB. Investors are
urged to consider these factors carefully in evaluating the forward looking statements and
are cautioned not to place undue reliance on such forward-looking statements. The
forward-looking statements made herein are only made as of the date hereof and we will
undertake no obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

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

In
this annual report, unless otherwise specified, all dollar amounts are expressed in United
States dollars.

Our
shares of common stock described in this annual report reflect our seven for one forward
stock split, which was effected on February 6, 2006, and a two for one forward stock
split, which was effected on October 30, 2006.

Unless
otherwise indicated, all references to we, us, our ,
Company and ACRO meansACRO Inc.

Corporate Overview

We
develop a product for the detection of peroxide-based 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.

Initially,
our business has been to provide professional consulting services for the technical and
economic evaluation of petroleum and natural gas resources.

Since,
we were not successful in fully implementing our initial business plan for the consulting
services, we have decided to no longer offer consulting services to oil and gas companies.
Accordingly, on March 15, 2006, we completed our acquisition of a patent pursuant to a
patent purchase agreement with Dr. Ehud Keinan, which we refer here as the Patent Purchase
Agreement. The patent, 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.

4

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On
January 19, 2006, we closed a private placement consisting of 20,200,012 shares of common
stock for total gross proceeds of $43,286 in the form of a promissory note payable upon
demand, in which two of our current directors, Gadi Aner and Ehud Keinan, who were not
directors at that time, and Zeev Bronfeld, beneficial owner of more than 5% of our common
stock participated. Pursuant to the private placement, we issued, among others: (i)
2,300,004 shares of common stock to Gadi Aner for a total consideration of US$4,929; (ii)
2,800,000 Shares to M.G-Net Ltd., a private company, wholly-owned by Mr. Aner and his
wife, for a total consideration of US$6,000; and (iii) 6,400,002 shares of common stock to
BioTech Knowledge LLC, a private company wholly-owned by Ehud Keinan, for a total
consideration of $13,714. In addition, pursuant to a share purchase agreement dated
January 10, 2006, two of our former directors, Nick DeMare and Brad Colby, sold their
entire interests in us, 14,000,000 shares of common stock, to BioTech Knowledge LLC. As a
result of these two transactions, BioTech Knowledge LLC is our largest stockholders with
approximately 30.38% of our common stock.

As
of December 31, 2006, we had not realized any significant revenues from operations.

Our Current Business

With
the execution of the Patent Purchase Agreement to acquire U.S. Patent No. 6,767,717, we
changed our current mission to leverage our technology and capabilities in the field of
explosive detection devices, to commercialize a product for detection of explosives.

Our Products

We
recently finished developing and testing 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 intend to deliver these products to several international security
agencies for evaluation tests. We cannot assure that ACRO-P.E.T will gain commercial
acceptance in the marketplace.

The Market

Improvised
explosive devices based on peroxide containing materials have increasingly been used in
recent years by various terrorist organizations, especially in the UK, as well as in the
U.S. and in the Middle East. The main reason is that such peroxide-based explosives can be
easily home-made using inexpensive, readily available starting materials which
can be purchased in most hardware and paint stores, even in bulk quantities. One class of
such peroxide-based explosives can be easily produced by reacting various carbonyl
compounds (e.g. ketones, aldehydes and their derivatives) with hydrogen peroxide under
acid catalysis. For example, when a mixture of acetone, hydrogen peroxide and small
amounts of a mineral acid such as sulfuric acid is left for several hours at room
temperature, white crystals of triacetone triperoxide, commonly referred to as TATP, and
diacetone diperoxide, commonly referred to as DADP, are formed.

These
crystals are collected and can be stashed with water or with 10% sodium carbonate
solution. TATP and DADP are powerful initiators by themselves and can be used as the main
filler in home-made detonators. They are quite unstable explosives and may explode under
rough handling, scratching with metals or by sparks and open flame, even when they contain
up to 25% water or even when immersed in water. The explosive intensity of TATP is
approximately 5/8 that of TNT. This material is quite volatile, unless used shortly after
its manufacture, should be stored in a cool, dark dry place.

Another
commonly used peroxide based explosive is hexamethylenetriperoxidediamine, commonly
referred to as HMTD. It can be prepared by treating hexamethylenetetramine with hydrogen
peroxide in the presence of a weak acid, such as citric acid, in order to neutralize the
liberated ammonia.

5

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Although
many peroxide containing materials of the above-described type are known for more than 70
years, no satisfactory method for their field detection has been suggested to date. The
detection of peroxide-based explosives is particularly difficult because all these
materials do not contain nitro groups or any other nitrogen oxide functional groups. Since
most of the currently available explosive detectors are based on the detection of nitro
groups, they cannot be employed for detection of peroxide-based materials. Consequently,
and in view of the increased use of such peroxide-based explosives by terrorists,
especially in the Middle East as well as in other parts of the world, there exists an
urgent need for highly sensitive method, and devices for the early detection of
peroxide-based explosives and improvised explosive devices employing them.

Most
of the commonly used procedures today for explosive detection are not effective in
identifying peroxide based explosives. The three overall methods of explosives detection
in use today are:

|(a) | Manual
- searching by hand and/or with the use of specially trained dogs. This practice involves
       obvious risks.
|--- | ----------------------------------------------------------------------------------------------------------------------

|(b) | Bulk
Detection  attempts to detect macroscopic mass on the basis of characteristic
specific   gravity using X-ray or CT techniques.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(c) | Trace
Detection  senses the presence of explosives through chemical identification of
  microscopic residues of the compound, in either vapor or particle form. Trace
detection is generally used to resolve alarms raised when suspicious items are identified
either manually or through bulk detection.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To
address this need to provide reliable and effective detection of peroxide-based
explosives, we plan to develop and launch a series of devices for the identification of
explosives and other suspect substances based on the intellectual property covered by U.S.
Patent No. 6,767,717. We believe, once our potential explosive detection devices are ready
for the market, they will be supplied for use by law enforcement, military and security
staff at terrorist target locations.

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 Jacob Bar-Shalom, who serves as our Acting Chief Financial
Officer. Our subsidiary also hired a Chief Operating Officer and administrative staff.

Competition

We
are 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 Triacetone Triperoxide (also known as 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. 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.

Manufacturing

We
do not manufacture our products internally, and engaged a third party for the supply and
manufacturing of our product. We have no long-term supply agreements with our sole
supplier and manufacturer, and cannot assure you that we will be able to obtain such
components on a timely basis or at acceptable prices, if at all. If we are unable to
obtain our key components at acceptable prices and on a timely basis, we may not be able
to meet the demand for our products, which would adversely affect our production
capability, our reputation and results of operations.

6

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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 pursuant to the
Patent Purchase Agreement from Dr. Ehud Keinan. Under the Patent Purchase Agreement we
purchased 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
abstract 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. The
invention also provides a kit for use in the method of the invention.

During
the twelve months ended December 31, 2006, we have invested a total of $111,401 in
research and development activities and we did not invest in research and development for
the comparative period in 2005.

Government Approvals

Our
ability to develop and commercialize our products is dependent upon approval from certain
governmental security organizations, such as the US Transportation Security Agency and the
Israeli Security Agency. In addition, pursuant to Israeli law, as our product may be
deemed a security related product, we may be required to obtain a permit to sell, trade,
or negotiate the sale of our products to third parties, which we have not yet obtained.

# RISK FACTORS

Set
forth below are certain risk factors that could harm our business, results of operations
and financial condition. You should carefully read the following risk factors, together
with the financial statements, related notes and other information contained in this
Annual Report on Form 10-KSB. This Annual Report on Form 10-KSB contains forward
looking statements that contain risks and uncertainties. Please refer to the
discussion of Forward-Looking Statements on page one of this Annual Report on
Form 10-KSB in connection with your consideration of the risk factors and other important
factors that may affect future results described below.

# Risks Relating to Our
Business

We have a history of
losses and we expect to incur losses for the foreseeable future.

We
incurred net losses of $1,351,583 for the year ended December 31, 2006 and as of December
31, 2006, we had an accumulated deficit of $1,552,415 and working capital of $243,421.

We
anticipate that we will require up to approximately $1,867,000 funding the implementation
of our business plan and research and development for our potential explosive detection
products for the next twelve-month period. Although we intend to generate revenues and
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.

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 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 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. Any additional equity financing may involve
substantial dilution to our then existing shareholders.

7

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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 completed our acquisition of U.S. Patent No. 6,767,717 on March 15,
2006 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 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 no supply agreements
with our key supplier, who supply and manufacture our product. If we need to replace our
supplier and manufacturer, we may not be able to meet the demand for our product.

We
do not manufacture our products internally, and we have a single source of supply for the
components of our product, and the manufacturing of our product. We have no long-term
supply agreements with our sole supplier and manufacturer. If we need to replace our
supplier and manufacturer, we may not be able to meet the demand for our products, which
would adversely affect our production capability, our reputation and results of
operations.

We are a development
stage company with a non-commercialized technology and little experience in the operation
of our business. There is a risk that our business may fail.

To
date, we have been involved primarily in research, testing and product development. We
have only a limited operating history and no experience in producing and bringing to
market our products. We may experience in the future many of the problems, delays and
expenses encountered by any early stage business, many of which are beyond our control.
These problems include, but are not limited to:

| |  | substantial
delays and expenses related to testing, development, and production of our products;
| | - | ------------------------------------------------------------------------------------------------

| |  | unanticipated
difficulties relating to the production and marketing of a new product in the
        marketplace;
| | - | ----------------------------------------------------------------------------------------------------------------

| |  | competition
from larger and more established companies; and
| | - | -----------------------------------------------------------

| |  | lack
of market acceptance of our new products and technologies.
| | - | ---------------------------------------------------------------

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

We
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.

8

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Our major shareholders,
officers, directors and affiliated entities own a majority of our shares and control us.

Our major shareholders, executive
officers, directors and entities affiliated with them, in the aggregate, will beneficially
own approximately 46.9% of our outstanding shares. These shareholders, if acting together,
would be able to control all matters requiring approval by our shareholders, including the
election of directors and the approval of mergers or other business combination
transactions.

We Depend Upon Key
Personnel.

Our
success is heavily dependent on the continued active participation of our current Chairman
and Interim Chief Executive Officer Gadi Aner and our director Ehud Keinan. Loss of the
services of one or both of these individuals could have a material adverse effect upon our
business, financial condition or results of operations. None of these individuals
currently have any plans to retire or leave ACRO in the near future. We do not maintain
any key life insurance policies for any of these individuals or other personnel. The loss
of any of our senior personnel could significantly impact our business until adequate
replacements can be identified and put in place.

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 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.

We may be subject to
government approvals and regulations that reduce our ability to commercialize our products,
increase our costs of operations and decrease our ability to generate income.

Our
ability to develop and commercialize our products is dependent upon approval from certain
governmental security organizations, such as the US Transportation Security Agency and the
Israeli Security Agency. There can be no assurance that we will obtain regulatory
approvals and certifications for our products. Even if we are granted such regulatory
approvals and certifications, it may be subject to limitations imposed on the use of its
products. In the future, we may be required to comply with certain restrictive
regulations, or potential future regulations, rules, or directives. We cannot guarantee
that restrictive regulations will not, in the future, be imposed. Such potential
regulatory conditions or compliance with such regulations may increase our cost of
operations or decrease our ability to generate income. In addition, pursuant to Israeli
law, as our product may be deemed a security related product, we may be required to obtain
a permit to sell, trade, or negotiate the sale of our products to third parties, which we
have not yet obtained.

We May Have Difficulties
Managing Growth Which Could Lead to Higher Losses.

While
we have not yet achieved any revenues through the production and sale of our products,
should certain events occur, we might be in a position to rapidly commercialize our
products. Rapid growth would strain our human and capital resources, potentially leading
to higher operating losses. Our ability to manage operations and control growth will be
dependent upon our ability to raise and spend capital to improve our operational,
financial and management controls, reporting systems and procedures, and to attract and
retain adequate numbers of qualified employees. Should we be unable to successfully create
improvements to our internal procedures and controls in an efficient and timely manner,
management may receive inadequate information necessary to manage our operations, possibly
causing additional expenditures and inefficient use of existing human and capital
resources.

9

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We may seek to expand our
business through acquisitions that could result in a diversion of resources and additional
expenses, which could disrupt our business and harm our financial condition.

We
may, in the future, pursue acquisitions of businesses, products and technologies, or
establish joint venture arrangements to expand our business. The negotiation of potential
acquisitions or joint ventures, as well as the integration of an acquired or jointly
developed business, technology, service or products could divert managements time as
well as our resources, and disrupt our operations and cause our business to suffer. We
have not acquired a business in the past, and we may be unable to successfully integrate
acquired businesses or joint ventures with our operations. Future acquisitions may also
require additional capital, which may not be available on favorable terms, if at all, or
which may dilute the interests of our shareholders.

Our principal office is
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 office is located in Israel. As a result, we are 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 and
economic problems for Israel and companies based in Israel.

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.

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 judgment and civil
liabilities against our officers, directors, experts and agents.

Our
officers, Mr. Gadi Aner 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 700,000,000 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.

10

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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.

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 a limited
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 limited trading market for our common stock and such a market may not develop
or be sustained. Our common stock is eligible for quotation on the National Association of
Securities Dealers Inc.s OTC Bulletin Board. We cannot provide our investors with
any assurance that our common stock will be traded on the OTC Bulletin Board or, if
traded, 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.

Penny Stock
Rules may restrict the market for Acros shares

Our
shares of common stock are subject to rules promulgated by the Securities and Exchange
Commission relating to penny stocks, which generally apply to companies whose
shares trade at less than $5.00 per share, or who do not meet certain other financial
requirements specified by the Securities and Exchange Commission. These rules require
brokers who sell penny stocks to persons other than established customers and
accredited investors to complete certain documentation, make suitability
inquiries of investors, and provide investors with certain information concerning the
risks of trading in the such penny stocks. These rules may discourage or restrict the
ability of brokers to sell our shares of common stock in the secondary market.

# Item 2. Description of
Property

As
of February 20, 2007, we have signed a lease agreement for our offices in 37 Inbar St.,
Caesarea, Israel. These offices serve as our headquarters offices.

# Item 3. Legal Proceedings

We
are not a party to, or the subject of, any pending legal proceeding. We are not aware of
any proceeding being contemplated by a governmental authority.

11

---

---



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

There
were no matters submitted to a vote of our security holders either through solicitation of
proxies or otherwise in the forth quarter of the fiscal year ended December 31, 2006.

# PART II

# Item 5. Market for
Common Equity, Related Stockholder Transactions and Small Business Issuer Purchases of Equity
Securities.

Our
shares of common stock were initially approved for quotation on the Over-the-Counter
Bulletin Board (OTCBB) under the symbol MNAI on September 14, 2004. On
February 6, 2006, as a result of our seven for one forward split, the National Association
of Securities Dealers, Inc. changed our trading symbol to MDIN, but there was
no market for common stock until March 23, 2006. 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. As a result
our common stock is quoted under the new symbol ACRI.

The
following table sets forth the high and low bid prices of our Common Stock, as reported by
the OTCBB for each quarter since March 23, 2006. The quotations set forth below reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not represent
actual transactions.

|            | 2005 | 2006
|----------- | ---- | ----
|
|
|
|
|1st Quarter |      |     
|2nd Quarter |      |     
|3rd Quarter |      |     
|4th Quarter |      |     

Outstanding Shares and
Shareholders of Record

As
of March 23, 2007, there were 67,131,686 shares of our common stock issued and
outstanding. These shares were held by approximately forty (40) shareholders of record.

Dividends

We
have not paid any cash dividends on our common stock and we do not anticipate paying any
cash dividends in the foreseeable future. Our current policy is to retain earnings, if
any, to fund the development and growth of our business. Any future determination to pay
cash dividends will be at the discretion of the board of directors and will be dependent
upon our financial condition, operating results, capital requirements, applicable
contractual restrictions and any other factors that our board of directors deems relevant.

Securities Authorized For
Issuance Under Equity Compensation Plans

We
do not currently have, nor have we since inception had, any equity compensations plans. We
have issued, and will issue, shares of our common stock to the members of our advisory
board for their service as advisory board members. See  Recent Sales of
Unregistered Securities.

Recent Sales of
Unregistered Securities

On
February 27, 2007, we closed a private placement of 2,000,000 units, at a price of US$0.75
per unit, for aggregate proceeds of US$1,500,000. Each unit comprising one share of our
common stock and one warrant to purchase one share of our common stock at the price per
share of $1.25 exercisable within five years. In connection with the private placement, we
paid a finders fee of $120,000 in cash and issued a warrant to purchase 160,000
units to the finder. We issued the securities to a non-U.S. person (as that term is
defined in Regulation S of the Securities Act of 1933, as amended) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933, as
amended.

12

---

---



In
April 2006, we appointed Mr. Ehud Barak to serve on our advisory board. Mr. Barak will
receive a grant of 166,666 shares of common stock for each quarter of service on our
advisory board. As of December 31, 2006, Mr. Barak was entitled to receive 499,998 shares
of our common stock with a total fair market value of $668,331 of which, 333,332 shares
were issued as of December 31, 2006.

In
May 2006, we appointed Mr. Richard A. Lerner, as an additional member of our advisory
board. Mr. Lerner will receive a grant of 16,666 shares of common stock for each quarter
of service on our advisory board, not to exceed a total of 200,000 shares. As of December
31, 2006, Mr. Lerner was entitled to receive 39,010 ordinary shares of our common stock
with a total fair market value of $55,843 of which 22,344 shares were issued as of
December 31, 2006.

In
September 2006, we appointed Mr. K. Barry Sharpless to serve on our advisory board. Mr.
Sharpless will receive a grant of 16,666 shares of common stock for each quarter of
service on our advisory board, not to exceed a total of 200,000 shares. As of December 31,
2006, Mr. Sharpless was entitled to receive 16,666 shares with a total fair market value
of $25,166 none of which were granted as of December 31, 2006.

Additional
199,998 shares which were earned by the advisory board members during the three months
ended December 31, 2006, were issued in March 2007.

Purchases of Equity
Securities by the Issuer and Affiliated Purchasers

None.

# Item 6. Plan of Operation

You
should read the following discussion in conjunction with our consolidated financial
statements and related notes thereto. In addition to historical information, this
discussion contains forward-looking statements that involve risks, uncertainties and
assumptions that could cause actual results to differ materially from managements
expectations. Factors that could cause such differences include those described in
Risk Factors in Item 1. in this Annual Report on Form 10-KSB.

# Plan of Operation

Our
primary objectives over the 12 month period are to, develop, manufacture, and
commercialize our first product called the Peroxide Explosives Tester or ACRO-P.E.T, which
is a detection device for peroxide-based explosives using the intellectual property
covered in U.S. Patent No. 6,767,717.

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 Annual Report, we also intend to exploit
further our technology and develop additional products as described in the Product
in Development section below.

Purchase or Sale of
Equipment

For
the next 12 months we plan to purchase equipment for s a total of approximately $78,000
for lab equipment, furniture and office equipment.

13

---

---



Cash Requirements

Our
cash requirement for the next 12 months is approximately $1,867,000 which we need to
implement our plan of operation and developing and commercializing out 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 30.38% of
Acros outstanding common stock. In addition, we estimate our operating expenses and
working capital requirements for fiscal year 2007 to be as follows:

Estimated Expenses to December 31, 2007

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

At
December 31, 2006, we had a working capital of $243,421. Since January 1, 2007 we have
raised additional sum of approximately $1,500,000 in a private placement. In accordance
with our current monthly expenses, this will satisfy our cash requirement only until
December 31, 2007. 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.

Financial Condition,
Liquidity and Capital Resources

During
the twelve months ended December 31, 2006, we incurred a loss of $1,351,583, comparable to
a net loss of $157,665 for the comparative period in 2005.

During
the twelve months ended December 31, 2006, we incurred $1,358,040 of operating expenses,
comprised primarily of $111,401 for research and development costs, $749,340 for
stock-based compensation expenses, $19,882 for sales and marketing costs, $477,417 for
general and administrative cost.

During
the twelve months ended December 31, 2005, we incurred $157,665 of operating expenses,
comprising primarily of $139,905 for due diligence services, $11,010 for general and
administrative costs and $6,750 for accounting, administrative, and consulting services.

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

At December
31, 2006, our company had total assets of $581,259, which consisted mainly 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 $42,433.

At
December 31, 2006, our companys total liabilities were $148,088.

We had
no revenues during the twelve months ended December 31, 2006, and no significant revenues
from inception through December 31, 2006.

14

---

---



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 first commercial product, the
ACRO-P.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 December 31, 2006, we have incurred losses
of $1,552,415 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 December 31, 2007. However,
the viability of Acro for a significant period of time beyond December 31, 2007 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.

Recent Private Placements

On
October 21, 2006, our board of directors resolved to increase our capital stock from
350,000,000 shares of Common Stock to 700,000,000 shares of Common Stock and approved a
two (2) for one (1) forward stock split of our issued and outstanding shares of common
stock as of October 30, 2006. We amended our Articles of Incorporation by filing a
Certificate of Change with the Nevada Secretary of State wherein we stated that we
increased our authorized capital stock and that we will issue an additional share for
every one share of common stock issued and outstanding on October 30, 2006 immediately
prior to the effective date of the forward stock split. The forward stock split increased
the issued and outstanding share capital from 32,374,178 shares of common stock to
64,748,356 shares of common stock.

On
February 27, 2007, we closed a private placement of 2,000,000 units, at a price of US$0.75
per unit, for aggregate proceeds of US$1,500,000. Each unit comprising one share of our
common stock and one warrant to purchase one share of our common stock at the price per
share of $1.25 exercisable within five years. In connection with the private placement, we
paid a finders fee of $120,000 in cash and issued a warrant to purchase 160,000
units to the finder.

Product

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 intend to deliver
these products to several international security agencies for evaluation tests. To date,
the data supporting our development programs is derived solely from laboratory and limited
early stage trials that were not all designed to be statistically significant or
proof-of-concept trial, some of which are exploratory in nature. We cannot assure you that
our ACRO-P.E.T will gain commercial acceptance in the marketplace.

We
plan to follow ACRO-P.E.T with additional future products utilizing our proprietary
technologies and public domain methods for detecting other explosives.

15

---

---



Critical
Accounting Policies

Share Based Compensation

Prior
to fiscal 2006, we 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 Acro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 income
prior to fiscal year 2006 as no options or similar instruments have been granted during
that period. As of January 1, 2006, Acro adopted Statement No. 123 (revised 2004),
Share-Based Payment (SFAS No. 123(R)). All stock-based awards to nonemployees
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). Acro 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. Acro
recorded the stock based compensation granted to consultant on the date the consultant
earn the awarded shares in the same manner as if Acro paid cash to the consultant for his
services.

Recent Accounting
Pronouncements

In
June 2006, the FASB issued 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 FASB Statement 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. FIN 48 is effective for fiscal years beginning after December
15, 2006. Acro is currently evaluating the effect that the application of FIN 48 will have
on its results of operations and financial condition.

In
September 2006, the 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. Acro 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
Acros consolidated financial position, results of operations or cash flows.

16

---

---



In
February 2007, the FASB issued FASB 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. We do not anticipate that the adoption of this new
statement at the required effective dated will have a significant effect in its results of
operations, financial position or cash flows.

Recently Adopted
Accounting Standards

Effective
January 1, 2006, we adopted the fair value recognition provisions of statement 123(R)
using the modified-prospective-transition method (See above at Critical Accounting
Policies).

In
May 2005, the FASB issued Statement 154, Accounting Changes and Error Corrections
 a replacement of APB Opinion No. 20 and FASB Statement No. 3, or (SFAS No. 154).
SFAS No. 154 changes the accounting for and reporting of a change in an accounting
principle. The provisions of SFAS No. 154 require, unless impracticable, retrospective
application to prior periods financial statements of (i) all voluntary changes in
accounting principles and (ii) changes required by a new accounting pronouncement, if a
specific transition is not provided. SFAS No. 154 also requires that a change in
depreciation, amortization, or depletion method for long-lived, non-financial assets be
accounted for as a change in accounting estimate, which requires prospective application
of the new method. SFAS No. 154 is effective for all accounting changes made in fiscal
years beginning after December 12, 2005. Acros adoption of SFAS No. 154 did not have
a material effect on Acros consolidated results of operations and the financial
position.

# 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 $60,150 for the duration of these lease agreements.

# Item 7. Financial
Statements

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

17

---

---



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                        | Page
|------------------------------------------------------- | ----
|
|
|
|
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-2 
|CONSOLIDATED FINANCIAL STATEMENTS:                     
|Balance sheets                                          | F-3 
|Statements of operations                                | F-4 
|Statements of changes in stockholders' equity (deficit) | F-5 
|Statements of cash flows                                | F-6 
|Notes to financial statements                           | F-7 



---

---



# Report of Independent
Registered Public Accounting Firm

The Board of Directors and Stockholders
ACRO Inc. (formerly Medina International Corp.)
(A Development Stage Company)

We have audited the accompanying
consolidated balance sheets of ACRO Inc. (formerly Medina International Corp.) (A
Development Stage Company) and subsidiary (hereinafter  the Company) as
of December 31, 2006 and 2005, and the related consolidated statements of operations,
stockholders equity (deficit) and cash flows for each of the years in the two-year
period ended December 31, 2006 and for the cumulative period from May 22, 2002 (date of
inception) to December 31, 2006. These consolidated financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of ACROInc. (formerly Medina International Corp.) (A
Development Stage Company) and subsidiary as of December 31, 2006 and 2005, and the
results of their operations, and their cash flows for each of the years in the two-year
period ended December 31, 2006 and for the cumulative period from May 22, 2002 (date of
inception) to December 31, 2006, in conformity with accounting principles generally
accepted in the United States of America.

As discussed in Notes 2J and 2P to
the consolidated financial statements, effective January 1, 2006, the Company adopted the
fair value method of accounting for stock-based compensation as required by Statement of
Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment.

Somekh Chaikin
Certified Public Accountants (Isr.)
Member Firm of KPMG International
Tel Aviv, Israel
March 26, 2007

F - 2

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Consolidated Balance Sheets                                                                                  
|                                                                                                             

|                                                               | December 312006 | December 312005
|-------------------------------------------------------------- | --------------- | ---------------
|
|
|
|
|Assets                                                         |                 |                
|                                                               |                 |                
|Current assets:                                                |                 |                
|Cash and cash equivalents                                      |                 |                
|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 (deficit)                 |                 |                
|                                                               |                 |                
|Current liabilities:                                           |                 |                
|Short term bank-credit                                         |                 |                
|Accounts payable and accrued liabilities                       |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Total current liabilities                                      |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Accrued severance pay                                          |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Total liabilities                                              |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Commitments (Notes 7 and 9)                                    |                 |                
|                                                               |                 |                
|Stockholders' equity (deficit):                                |                 |                
|Common stock; $0.001 par value; 700,000,000 shares authorized; |                 |                
|64,931,688 and 42,000,000 shares issued and outstanding as of  |                 |                
|December 31, 2006 and December 31, 2005, respectively          |                 |                
|Additional paid-in capital                                     |                 |                
|Deficit accumulated during the development stage               |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Total stockholders' equity (deficit)                           |                 |                
|                                                               |                 |                
|                                                               |                 |                
|Total liabilities and stockholders' equity (deficit)           |                 |                
|                                                               |                 |                

The accompanying notes are an
integral part of the consolidated financial statements.

F - 3

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Operations                                                                        
|                                                                                                             

|                                                    | Year ended December 31 | Cumulativefrom inception(May 22, 2002)to December 31
|--------------------------------------------------- | ---------------------- | ----------------------------------------------------
|
|
|
|
|Revenues                                            |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Costs and expenses :                                |                        |                                                     
|Research and development                            |                        |                                                     
|Sales and marketing                                 |                        |                                                     
|General and administrative *                        |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Total operating expenses                            |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Operating loss                                      |                        |                                                     
|Interest income, net                                |                        |                                                     
|                                                    |                        |                                                     
|Loss before income taxes                            |                        |                                                     
|Income tax                                          |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Net loss                                            |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Basic and diluted net loss per common share         |                        |                                                     
|                                                    |                        |                                                     
|                                                    |                        |                                                     
|Weighted average number of shares used in computing |                        |                                                     
|basic and diluted net loss per common share         |                        |                                                     
|                                                    |                        |                                                     

|* | Includes
$749,340 in stock-based compensation to non-employees for the year ended December 31,
2006.
|- | ----------------------------------------------------------------------------------------------------

The accompanying notes are an
integral part of the consolidated financial statements.

F - 4

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Statement of Stockholders' Equity (Deficit)                                                                  
|                                                                                                             

|                          | Common stock | Additionalpaid-incapital | Deficitaccumulatedduring thedevelopmentstage | Totalstockholders'equity(deficit)
|------------------------- | ------------ | ------------------------ | -------------------------------------------- | ---------------------------------
|
|
|
|
|Inception, May 22, 2002   |              |                          |                                              | -                                
|Sale of common stock      |              |                         
|for cash                  |              |                          |                                              | 14,000,000                       
|Net loss for the period   |              |                          |                                              | -                                
|                          |              |                          |                                              |                                  
|Balance as at             |              |                         
|December 31, 2002         |              |                          |                                              | 14,000,000                       
|Services contributed      |              |                         
|by officers               |              |                          |                                              | -                                
|Sale of common stock      |              |                         
|for cash                  |              |                          |                                              | 28,000,000                       
|Offering costs            |              |                          |                                              | -                                
|Net loss for the year     |              |                          |                                              | -                                
|                          |              |                          |                                              |                                  
|Balance as at             |              |                         
|December 31, 2003         |              |                          |                                              | 42,000,000                       
|Net loss for the year     |              |                          |                                              | -                                
|                          |              |                          |                                              |                                  
|Balance as at             |              |                         
|December 31, 2004         |              |                          |                                              | 42,000,000                       
|Net loss for the year     |              |                          |                                              | -                                
|                          |              |                          |                                              |                                  
|Balance as at             |              |                         
|December 31, 2005         |              |                          |                                              | 42,000,000                       
|Issuance of common        |              |                         
|stock on January 19, 2006 |              |                          |                                              | 20,200,012                       
|Issuance of common        |              |                         
|stock and warrants  on    |              |                         
|March 15, 2006            |              |                          |                                              | 2,376,000                        
|Offering costs            |              |                          |                                              | -                                
|Issuance of common stock  |              |                         
|on September 5, 2006      |              |                          |                                              | 172,344                          
|Issuance of common stock  |              |                         
|on November 6, 2006       |              |                          |                                              | 183,332                          
|Stock-based compensation  |              |                         
|to non-employees          |              |                          |                                              | -                                
|Net loss for the year     |              |                          |                                              | -                                
|                          |              |                          |                                              |                                  
|Balance as at             |              |                         
|December 31, 2006         |              |                          |                                              | 64,931,688                       
|                          |              |                          |                                              |                                  

The accompanying notes are an integral
part of the consolidated financial statements.

F - 5

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Consolidated Statements of Cash Flows                                                                        
|                                                                                                             

|                                                      | Year ended December 31 | Cumulativefrom inception(May 22, 2002) toDecember 31
|----------------------------------------------------- | ---------------------- | ----------------------------------------------------
|
|
|
|
|Cash flows from operating activities:                 |                        |                                                     
|Net loss                                              |                        |                                                     
|                                                      |                        |                                                     
|Adjustments to reconcile net loss to net cash used in |                        |                                                     
|operating activities:                                 |                        |                                                     
|Services contributed by officers                      |                        |                                                     
|Depreciation and amortization                         |                        |                                                     
|Stock-based compensation                              |                        |                                                     
|                                                      |                        |                                                     
|Changes in operating assets and liabilities:          |                        |                                                     
|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:                 |                        |                                                     
|Increase in long term deposit                         |                        |                                                     
|Purchase of property and equipment                    |                        |                                                     
|Purchase of intangible assets                         |                        |                                                     
|                                                      |                        |                                                     
|Net cash used in investing activities                 |                        |                                                     
|                                                      |                        |                                                     
|Cash flows from financing activities:                 |                        |                                                     
|Increase in short term bank-credit                    |                        |                                                     
|Proceeds from issuance of common stock                |                        |                                                     
|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                                   |                        |                                                     
|                                                      |                        |                                                     

The accompanying notes are an
integral part of the consolidated financial statements.

F - 6

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 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 of control and a private placement financing (see Note 6), the Company ceased to
engage in the oil and gas consulting business and engaged in development of products for
the detection of peroxide based explosives 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 December 31, 2006 of $1,552,415. Management believes that the Company
has sufficient cash and working capital to support forecasted operating results, capital
expenditures and commitments through at least December 31, 2007. However, the viability of
the Company for a significant period of time beyond December 31, 2007 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Subsequent
to the balance sheet date, on February 27, 2007, the Company closed a private placement
for aggregate proceeds of $1,500,000, see Note 10 for more details.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 2  Summary of
Significant Accounting Policies

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

| | The
 accompanying  consolidated  financial  statements  are  prepared in  accordance  with
U.S.  generally          accepted accounting principles ("U.S. GAAP").
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | The
preparation of the consolidated financial statements in conformity with 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 7

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

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

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

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

| | D. | Cash
equivalents
| | -- | ----------------

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | The
Company considers the functional currency of the parent and subsidiary companies to be in
U.S. dollars and accordingly, the accompanying financial statements have been prepared in
U.S. 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. | Impairment
of long-lived assets
| | -- | -------------------------------

| | The
Companys long-lived assets are reviewed for impairment in accordance with Statement
of Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS No. 144), whenever events
or changes in circumstances indicate that the carrying amount of the asset may not be
recoverable. Recoverability of an asset to be held and used is measured by a comparison of
the carrying amount of an asset to the future undiscounted cash flows expected to be
generated by the asset. If such asset is considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset exceeds its
fair value. Through December 31, 2006, no impairment losses were identified.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | G. | Research
and Development Costs
| | -- | ------------------------------

| | Costs
incurred in the research and development of the Companys product are expensed as
incurred.
| | -------------------------------------------------------------------------------------------------

| | H. | Property
and Equipment
| | -- | ----------------------

| | Property
and equipment are recorded at cost and depreciated using the straight-line method over
their estimated useful lives as described in Note 3. Expenditures for repairs and
maintenance are expensed as incurred.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 8

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

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

| | I. | Income
taxes
| | -- | ------------

| | The
Company accounts for income taxes in accordance with SFAS No. 109, Accounting for
Income Taxes. This Statement prescribes the use of the asset and liability method of
accounting whereby deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted
tax laws and rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect of a change in
tax rates on deferred tax assets and liabilities is recognized in income in the period
that includes the enactment date. Valuation allowances are provided if, based upon the
weight of available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | J. | 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 income
prior to fiscal year 2006 as no options or similar instruments have been granted during
that period. As of January 1, 2006 the Company adopted Statement No. 123 (revised 2004),
Share-Based Payment (SFAS No. 123(R)). All stock-based awards to
nonemployees 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | K. | 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, during the respective
period; after giving retroactive effect to the stock splits that occurred during January
2006 and October 2006 (see Notes 6 and 7). Warrants to purchase 2,376,000 shares of common
stock, issued in March 2006 at an exercise price of $0.75 per share, were excluded from
the computation of diluted net loss per share for the periods ended December 31, 2006, as
such warrants were anti-dilutive since the Company incurred losses in those periods. No
warrants were outstanding as of December 31, 2005. See note 10 for 2,000,000 common stock
shares and warrants to purchase 2,000,000 shares of common stock, the issued on February
27, 2007 subsequent to the balance sheet date.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 9

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

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

| | L. | Severance
pay
| | -- | -------------

| | The
Israeli subsidiarys liability for severance pay is calculated pursuant to
Israels Severance Pay Law, based on the most recent salary of the employee
multiplied by the number of years of employment, at the balance sheet date. Employees are
entitled to one months salary for each year of employment or a portion thereof. The
Companys liability for all of its Israeli employees is covered by monthly deposits
for insurance policies and/or pension funds and by accruals. The value of these policies
and/or funds is recorded as an asset in the Companys balance sheet. The deposited
funds include profits accumulated to the balance sheet date. The deposited amounts may be
withdrawn only upon the fulfillment of the obligations pursuant to Israels Severance
Pay Law or labor agreements. The value of the deposited funds is based on the cash
surrendered value of these policies, and includes profits. Severance expense for the years
ended December 31, 2006 and 2005 amounted to $7,151 and $0, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | M. | Fair
value of financial instruments
| | -- | -----------------------------------

| | The
carrying amounts of cash and cash equivalents, prepaid expenses and other current assets,
trade payables, other accounts payable and accruals approximate their fair value.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | N. | Reclassifications
| | -- | -----------------

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

| | O. | Recently
issued accounting pronouncements
| | -- | -----------------------------------------

| | In
June 2006, the FASB issued 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 FASB Statement 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. FIN 48 is effective for fiscal years beginning after December
15, 2006. The Company is currently evaluating the effect that the application of FIN 48
will have on its results of operations and financial condition.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
September 2006, the 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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 10

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

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

| | O. | Recently
issued accounting pronouncements (contd)
| | -- | --------------------------------------------------

| | 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 FASB 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 dated will have a significant effect in its
results of operations, financial position or cash flows.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | P. | Recently
adopted accounting standards
| | -- | -------------------------------------

| | Effective
January 1, 2006 the Company adopted the fair value recognition provisions of statement
123(R) using the modified-prospective-transition method (refer to Note 2J).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2005, the FASB issued Statement 154, Accounting Changes and Error Corrections
 a replacement of APB Opinion No. 20 and FASB Statement No. 3, or (SFAS No.
154). SFAS No. 154 changes the accounting for and reporting of a change in an
accounting principle. The provisions of SFAS No. 154 require, unless impracticable,
retrospective application to prior periods financial statements of (i) all voluntary
changes in accounting principles and (ii) changes required by a new accounting
pronouncement, if a specific transition is not provided. SFAS No. 154 also requires that a
change in depreciation, amortization, or depletion method for long-lived, non-financial
assets be accounted for as a change in accounting estimate, which requires prospective
application of the new method. SFAS No. 154 is effective for all accounting changes made
in fiscal years beginning after December 12, 2005. The Companys adoption of SFAS No.
154 did not have a material effect on the Companys consolidated results of
operations and the financial position.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 11

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

# Note 3  Property
and Equipment

| | Property
and equipment consist of the following:
| | ------------------------------------------------

| |                                                  | Estimated
useful life
(years) | December 31
2006 | December 31
2005
| | ------------------------------------------------ | ----------------------------- | ---------------- | ----------------
|
|
|
|
| | Computer equipment                               |                               |                  |                 
| | Production equipment                             |                               |                  |                 
| | Furniture                                        |                               |                  |                 
| |                                                  |                               |                  |                 
| |                                                  |                               |                  |                 
| | Less - Accumulated depreciation and amortization |                               |                  |                 
| |                                                  |                               |                  |                 
| |                                                  |                               |                 
| |                                                  |                               |                  |                 
| |                                                  |                               |                  |                 

| | Depreciation
expense for the year ended December 31 2006 and 2005 and for the cumulative period from
May 22, 2002 (date of inception) to December 31, 2006 was $12,209, $0 and $12,209,
respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 4  Intangible
Assets

| | In
March 2006, the Company purchased a patent from Ehud Keinan (Keinan), a
stockholder who holds 31.5% of the Companys shares of common stock, for $120,000.
The patent is being amortized over the life of the asset which is estimated at 10 years.
Amortization expense for each of the years ended December 31, 2006 and 2005 and for the
cumulative period from May 22, 2002 (date of inception) to December 31, 2006 was $9,493,
$0 and $9,493, respectively. The expected annual amortization expenses for each of the
next five years are $12,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 12

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

# Note 5  Income
Taxes

| | A. | Income
taxes
| | -- | ------------

| | Income
taxes included in the consolidated statements of operations represent current taxes as a
result of taxable income of the Israeli subsidiary which was formed in March 2006, in
accordance with local tax laws. In 2006, income before income taxes of the Israeli
subsidiary is $5,848, and the loss before income taxes for the parent Company in the US is
$1,354,141. The regular corporate tax rate in Israel for 2006 is 31%. The corporate tax
rates in Israel for 2007 and thereafter are as follows: 2007  29%, 2008  27%,
2009  26% and for 2010 and thereafter  25%. The applicable corporate tax rate
for the Company in the US is 34%.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | B. | Deferred
tax
| | -- | ------------

| | The
components of the deferred tax assets are as follows:
| | ---------------------------------------------------------

| |                                   | December 31
2006 | December 31
2005
| | --------------------------------- | ---------------- | ----------------
|
|
|
|
| | Deferred tax assets:              |                  |                 
| | Net operating loss carry forwards |                  |                 
| | Depreciation and amortization     |                  |                 
| |                                   |                  |                 
| | Total deferred tax assets         |                  |                 
| | Valuation allowance               |                  |                 
| |                                   |                  |                 
| |                                   |                  |                 
| | Net deferred tax assets           |                  |                 
| |                                   |                  |                 

| | The
valuation allowance for deferred tax assets as of December 31, 2006 and 2005, was $460,407
and $68,500, respectively. The U.S. deferred tax assets have been fully offset by a
valuation allowance. The net change in the total valuation allowance for the years ended
December 31, 2006 and 2005 was an increase of $391,907 and $53,606, respectively. In
assessing the realizability of deferred tax assets, management considers whether it is
more likely than not that some or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets depends on the generation of future taxable
income during the periods in which those temporary differences are deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected taxable income,
and tax planning strategies in making this assessment. In order to fully realize the
deferred tax asset, the Company will need to generate future taxable income prior to the
expiration of the deferred tax assets governed by the tax code. Based on the level of
historical taxable losses, management believes that it is more likely than not that the
Company will not realize the benefits of these deductible differences.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has net operating loss carryforwards for federal income tax purposes of
approximately $1,535,000 at December 31, 2006 and $201,400 at December 31, 2005. The
federal net operating losses will expire if not utilized on various dates through 2026.
Included in these losses are net operating loss carryforwards of approximately $201,400
that are subject to limitations due to an ownership change as defined under Section 382 of
the Internal Revenue Code that occurred in early 2006. Section 382 of the Internal Revenue
Code generally imposes an annual limitation on the amount of net operating loss
carryforwards that may be used to offset taxable income when a corporation has undergone
an ownership change. Based on managements best estimate, it is not probable that
these net operating loss carryforwards will be utilizable due to this ownership change
and, thus, no deferred tax assets were recognized for these net operating loss
carryforwards as of December 31, 2006.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 13

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

# Note 5  Income
Taxes (contd)

| | C. | Reconciliation
of income tax expense:
| | -- | -------------------------------------

| | A
reconciliation of the theoretical income tax computed on the loss before income taxes at
the statutory tax rate and the actual income tax provision is presented as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                           | Year ended December 31
| | --------------------------------------------------------- | ----------------------
|
|
|
|
| | Loss before income taxes as per the income statement      |                       
| |                                                           |                       
| |                                                           |                       
| | Tax calculated according to the statutory tax rate of 34% |                       
| |                                                           |                       
| | Increase (decrease) in income tax resulting from:         |                       
| | Non-deductible expenses                                   |                       
| | Change in valuation  allowance                            |                       
| | Foreign tax rate differential                             |                       
| |                                                           |                       
| | Total income taxes                                        |                       
| |                                                           |                       

# Note 6  Common
Stock

| | On
February 6, 2006, the Company effected a seven-for-one stock split of its authorized and
outstanding shares of common stock. As a result, the authorized capital was changed from
50,000,000 to 350,000,000 shares of common stock. The stock split did not vary the
aggregate par value of the common stock. All stock figures and per share data have been
retroactively restated to reflect the stock split.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
January 19, 2006, the Company consummated a private placement (the January 2006
Private Placement) pursuant to which the Company issued to certain investors
20,200,012 shares of common stock in consideration of a promissory note payable upon
demand issued by such investors to the Company, in an aggregate gross proceeds of $43,286.
The promissory note was paid in full by such investors 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 of control in the Company. On
March 15, 2006, the Company consummated a second private placement (the March 2006
Private Placement) pursuant to which the Company issued to certain investors
2,376,000 shares of common stock, together with warrants to purchase 2,376,000 shares of
common stock at an exercise price of $0.75 per share, exercisable until March 15, 2008 in
consideration of aggregate gross proceeds of $1,188,000, less offering costs of $99,031.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
September 5, 2006 and November 6, 2006, pursuant to advisory board agreements entered into
during the second quarter of 2006 (see Note 7), the Board of Directors approved the
issuance of 172,344 and 183,332 shares of common stock to consultants for advisory board
services received during the second and third quarters of 2006, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
October 30, 2006, the Company effected a 2:1 stock split. As a result, the authorized
capital was changed from 350,000,000 to 700,000,000 shares of common stock. The stock
split did not vary the aggregate par value of the common stock. All stock figures and per
share data have been retroactively restated to reflect the stock split.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 14

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

# Note 7 
Stock-Based Compensation

| | In
April 2006, the Company engaged a consultant to serve on the Companys advisory
board. The consultant will receive a grant of 166,666 shares of common stock for each
quarter of service provided on the Companys advisory board. As of December 31, 2006,
the consultant had earned 499,998 shares of common stock of which, 333,332 have been
granted and issued for services during the three months ended June 30, 2006 and September
30, 2006. An amount of 166,666 shares was earned for advisory board services during the
three months ended December 31, 2006, which shares were granted to the consultant on March
7, 2007. 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.
During the year ended December 31, 2006, compensation expense recorded in respect of the
shares earned by the consultant amounted to $668,331.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2006, the Companys subsidiary, ACROSEC Ltd., entered into an employment
agreement for a new Chief Executive Officer (CEO) for the subsidiary and for
the Company. The CEO was entitled to participate in the Employee Stock Incentive Plan and
to be issued up to 1,937,280 restricted shares of Common Stock or options to buy such
shares representing 3% of the Companys issued and outstanding share capital, when
an option plan is adopted by the Company. These options were subject to a vesting period
of three years starting the date of employment. As of December 31, 2006, no approval had
been given by the Board of Directors for the option grant. Thus, no option grant date was
established and therefore, no compensation expense was incurred by the Company for the
reported periods. On December 31, 2006, the Company terminated the employment agreement
with the CEO.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2006, the Company engaged an additional consultant to serve on the Companys
advisory board. The consultant will receive 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 December 31, 2006, the consultant had earned 39,010 shares
of common stock of which, 22,344 shares have been granted and issued for services during
the three months ended June 30, 2006 and September 30, 2006. An amount of 16,666 shares
was earned for services during the three months ended December 31, 2006, which shares were
granted to the consultant on March 7, 2007. 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. During the year ended December 31, 2006,
compensation expense recorded in respect of the shares earned by the consultant amounted
to $55,843.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2006, the Company engaged a new director to serve on the Companys Board of
Directors. As compensation, the Director will receive 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 the end of each quarter, the Director may purchase
up to 17,936 shares of the total shares granted. As of December 31, 2006, 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 will receive 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 December 31, 2006, the consultant had
earned 16,666 shares for services during the three months ended December 31, 2006, which
shares were granted on March 7, 2007. 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. During the year ended December 31, 2006, compensation
expense recorded in respect of the shares earned by the consultant amounted to $25,166.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 15

---

---



|ACRO Inc. (formerly Medina International Corp.)(A Development Stage Company)Consolidated Financial Statements
|-------------------------------------------------------------------------------------------------------------
|Notes to the Consolidated Financial Statements as of December 31, 2006                                       
|                                                                                                             

# Note 8  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 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 year ended December 31,
2006, the Company incurred $30,000 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 year ended December 31, 2006, the Company incurred an expense of $55,417 for
consulting services provided by the Companys Chairman of the Board
of Directors.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the year ended December 31, 2005, the Company incurred an expense of $6,750 for accounting
and administrative services provided by a company owned by a director of the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 9  Commitments

| | The
Company entered into non-cancellable operating lease agreements for vehicles and premises.
The future minimum lease payments under these leases at December 31, 2006 are as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                              | Amount
| | ---------------------------- | ------
|
|
|
|
| | Year ending December 31,     |       
| | 2007                         |       
| | 2008                         |       
| | 2009                         |       
| |                              |       
| | Total minimum lease payments |       
| |                              |       

| | Rent
expense for each of the years ended December 31, 2006 and 2005 and for the cumulative
period from May 22, 2002 (date of inception) to December 31, 2006 was $5,670, $0 and
$5,670, respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Note 10 
Subsequent Event

| | Subsequent
to the balance sheet date, on February 27, 2007, the Company closed 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. 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
a finder.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Additional
199,998 shares which were earned by members of the advisory board during the three months
ended December 31, 2006, were issued in March 2007, see Note 7.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

F - 16

---

---

Item 8. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure

On
May 1, 2006, we decided to engage new auditors as our independent accountants to audit our
financial statements. Our board of directors approved the change of accountants to Somekh
Chaikin, a member firm of KPMG International, an independent registered public accounting
firm. Accordingly, we dismissed Gordon, Hughes & Banks, LLP on May 1, 2006.

During
the term of their engagement commencing February 23, 2006, there were no disagreements
with Gordon, Hughes & Banks, LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which, if not resolved to
the satisfaction of Gordon, Hughes & Banks, LLP, would have caused Gordon, Hughes
& Banks, LLP to make reference to the subject matter of the disagreements in
connection with their report. The accountants report on the financial statements for
the year ended December 31, 2006 did not contain an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or accounting
principles, except that in the independent accountants report on the financial
statements for the year ended December 31, 2005, our previous independent accountants
raised substantial doubt about our ability to continue as a going concern.

We
have engaged the firm of Somekh Chaikin a member firm of KPMG International, effective as
of May 1, 2006. Somekh Chaikin a member firm of KPMG International was not consulted on
any matter relating to accounting principles to a specific transaction, either completed
or proposed, or the type of audit opinion that might be rendered on our financial
statements.

# Item 8A. Disclosure
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 annual 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.

Changes in Internal
Control Over Financial Reporting

During
the most recent fiscal quarter, there have not been any significant changes in our
internal controls over financial reporting or in other factors that have materially
affected, or are reasonably likely to materially affect, our internal controls over
financial reporting.

# Item 8B. Other
Information

None.

# PART III

# Item 9. Directors,
Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With
Section 16(a) of the Exchange Act

# Directors and Executive
Officers, Promoters and Control Persons

Our
current directors, executive officers and other significant employees, their ages,
positions held and duration each person has held that position, are as follows:

|Name             | Position Held with the Company            | Age | Date First Elected
or Appointed
|---------------- | ----------------------------------------- | --- | -------------------------------
|Gadi Aner        | Chairman, Interim Chief Executive Officer | 53  | March 15, 2006                 
|Ehud Keinan      | Director                                  | 59  | March 15, 2006                 
|Dan Elnathan     | Director                                  | 52  | March 15, 2006                 
|Jacob Bar Shalom | Acting Chief Financial Officer, Treasurer | 40  | April 23, 2006                 

Business Experience

The
following is a brief account of the education and business experience of each director and
executive officer during at least the past five years, indicating each persons
principal occupation during the period, and the name and principal business of the
organization by which he was employed.

# Gadi Aner

Since
2001 to present, Mr. Aner has been the founder and managing director of Symposia (Israel)
Ltd., which engages in the development of applications for the organization of events and
conferences and utilizes the Internet infrastructure to enable clients to use these
applications. From 1998 to 2000, Mr. Aner was the CEO of Verdant Biotechnologies Ltd.,
which is an agricultural biotechnology company developing technologies to enhance
resistance of agricultural crops. From 1995 to 1997, Mr. Aner served as the CEO of
Pharmore Therapeutics Ltd., which worked in collaboration with the Technion, the Israel
Institute of Technology, in developing less toxic, novel compounds for treatment of
cancer. Mr. Aner received his bachelors degree in economics and political sciences
from Haifa University.

18

---

---



# Ehud Keinan

Prof.
          Keinan is currently the Benno Gitter and Ilana Ben Ami Chair of Biotechnology at
          the Technions Faculty of Chemistry. He received his Ph.D. in Organic
          Chemistry from Weizmann Institute of Science in Israel in 1977 and undertook
          post-doctoral research in the Department of Chemistry at University of Wisconsin
          from 1977 to 1980. Since 2004, Prof. Keinan has served as the Dean of Faculty of
          Chemistry at the Technion. From 1999 to 2004, Prof. Keinan served as the founder
          and head of the Institute of Catalysis Science and Technology at the Technion.
          Prof. Keinan has received numerous honors and awards in the fields of chemistry
          and biochemistry. He has also published extensively in the areas of chemistry
          and biochemistry.

# Dan Elnathan

Mr.
          Elnathan is currently the chairman of the Accounting Department at the College
          of Management in Israel. He has served in that position since 2002. From 2000 to
          2001, he was a professor of clinical accounting at the University of Southern
          Californias School and Accounting. From 2004 to present, Mr. Elnathan also
          served as a member of the board of director and the chairman of the audit
          committee of Vita Pri Hagalil, an Israeli public company. Mr. Elnathan received
          his Ph.D. in Accounting from Wharton School of Business at University of
          Pennsylvania.

# Jacob Bar Shalom

Mr.
          Bar-Shalom has been our CFO since April 23, 2006. In addition to his role as the
          acting CFO of Acro, Mr. Bar-Shalom also serves as the CFO of MyThings Inc. Prior
          to that, from 2002 to 2005, Mr. Bar-Shalom has been the CFO of Digital Fuel
          Technologies, Inc., a leader provider of software tools for managing outsourcing
          activities for G2000 companies. From 1999 to 2001, Mr. Bar-Shalom was the CFO of
          ESPOC Inc., which provides eCommerce solutions for the trade of medical devices.
          From 1995 to 1999, Mr. Bar-Shalom served as a Manager at BDO Seidman LLP. From
          1993 to 1995, Mr. Bar-Shalom served as a Senior Auditor at Ernst &Young LLP.
          From 1990 to 1995 Mr. Bar-Shalom served a Financial Manager of Edusoft Inc, a
          publicly traded company. Mr. Bar-Shalom holds an MBA from the Hebrew University
          in Jerusalem, Israel, and he is a Certified Public Accountant.

Advisory Board

We have three members on our advisory
board:

|Name              | Date Appointed 
|----------------- | ---------------
|Ehud Barak        | April 6, 2006  
|Richard A. Lerner | May 31, 2006   
|K.Barry Sharpless | September, 2006

# Ehud Barak

Mr.
          Barak has been a member of our advisory board since April 6, 2006. In April
          1991, he assumed the post of the 14th Chief of the General Staff. He served as
          Israeli Minister of the Interior from July-November 1995 and as Minister of
          Foreign Affairs from November 1995 until June 1996. Elected to the Israeli
          Knesset in 1996, he served as a Member of the Knesset Foreign Affairs and
          Defense Committee. In 1996, General Barak was elected Chairman of the Labor
          Party. Ehud Barak was elected Prime Minister of Israel on May 17, 1999, forming
          his government to the Knesset on July 6, 1999, assuming office as Prime Minister
          and Minister of Defense. He completed his term as Prime Minister on March 7,
          2001. Ehud Barak holds a B.Sc. in Physics and Mathematics from the Hebrew
          University in Jerusalem (1976), and an M.Sc. in Engineering-Economic Systems
          from Stanford University, California (1978).

19

---

---



# Richard A. Lerner

Dr.
          Lerner has been a member of our advisory board since May 31, 2006. Dr. Lerner is
          an American research chemist and is currently President and Chief Executive
          Officer of The Scripps Research Institute (TSRI) in La Jolla, California. In
          1982 he was appointed Chairman of the Department of Molecular Biology of TSRI,
          then five years later assumed the directorship. In 1991, when the TSRI was
          established as a nonprofit entity, Dr. Lerner became its first president. Dr.
          Lerner is best known for his work on converting antibodies into enzymes,
          providing a method of catalyzing chemical reactions thought impossible using
          classical techniques. In addition to his research into catalytic antibodies, Dr.
          Lerner has led extensive studies into protein structure, characterized a novel
          lipid hormone that induces sleep, and provided the first evidence of a role for
          ozone in human disease. In addition to his role as President of TSRI, Dr. Lerner
          is the Lita Annenberg Hazen Professor of Immunochemistry and Cecil H. and Ida M.
          Green Chair in Chemistry. He was the recipient of, among other prizes and
          awards, the Parke Davis Award in 1978, the San Marino Prize in 1990, the Wolf
          Prize in Chemistry for 1994 (with Peter Schultz), the California Scientist of
          the Year Award in 1996, the University of California Presidential Medal in 2002,
          and the Paul Ehrlich-and Ludwig Darmstaedter Prize in 2003. He has also been
          elected to the Royal Swedish Academy of Sciences and the United States National
          Academy of Sciences. Dr. Lerner has numerous books and publications to his
          credit. Under Dr. Lerners leadership, The Scripps Research Institute has
          grown three-fold in terms of laboratory space and more than quadrupled its
          staff levels, making it among the largest nonprofit biomedical research
          organizations in the world. He also oversaw the establishment of a sister
          research campus, called Scripps Florida, in Palm Beach County.

# K.Barry Sharpless

Prof.
          Sharpless has been a member of our advisory board since September, 2006. Prof.
          Sharpless is a W. M. Keck Professor of Chemistry and a member of The Scripps
          Research Institute. Prof. Sharpless is also a 2001 Nobel Prize Laureate in
          Chemistry. Having completed a B.A. at Dartmouth College (T. A. Spencer) in 1963
          he went on to complete his Ph.D. at Stanford University (E. E. van Tamelen) in
          1968 continuing on to postdoctoral research there in 1968 (J. P. Collman) and at
          Harvard University in 1969 (K. Bloch).

# Compliance With
Section 16(a) of the Exchange Act

Section
16(a) of the Securities Exchange Act requires our executive officers and directors, and
persons who own more than 10% of our common stock, to file reports regarding ownership of,
and transactions in, our securities with the Securities and Exchange Commission and to
provide us with copies of those filings. Based solely on our review of the copies of such
forms received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2006, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial owners were
complied with.

20

---

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To
the best of our knowledge, all executive officers, directors and greater than 10%
stockholders filed the required reports in a timely manner, except for the following:

|Name                | Number of
Late Reports | Number of Transactions
Not Reported on a
Timely Basis | Failure to File
Requested Forms
|------------------- | ---------------------- | ----------------------------------------------------- | -------------------------------
|Ehud Keinan(1)      | 1                      | -                                                     | -                              
|Gadi Aner(1)        | 1                      | -                                                     | -                              
|Dan Elnathan(1)     | 1                      | -                                                     | -                              
|Jacob Bar Shalom(1) | 1                      | -                                                     | -                              
|Yami Tarsi(1)       | 1                      | -                                                     | -                              
|Nick DeMare(2)      | 1                      | 1                                                     | -                              
|Bradley Colby(2)    | 1                      | 1                                                     | -                              

|(1) | The named officer, director or greater than 10% shareholder, as applicable, filed a late
Form 3  Initial Statement of Beneficial Ownership.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
named former directors filed a late Form 4  Statement of Changes in Beneficial
Ownership.
|--- | ----------------------------------------------------------------------------------------------

# Code of Ethics

Effective
March 23, 2005, our Companys board of directors adopted a Code of Business Conduct
and Ethics and Compliance Program that applies to all of our Companys officers,
directors and employees. Our Code of Business Conduct and Ethics and Compliance Program
was filed with the Securities and Exchange Commission as Exhibit 14.1 to our Form 10-KSB
for the year ended December 31, 2004, filed on March 30, 2005. We will provide a copy of
the Code of Business Conduct and Ethics and Compliance Program to any person without
charge, upon request. Requests can be sent to: ACRO Inc., 37 Inbar Street, Caesarea,
Israel.

# Corporate Governance

Audit, Compensation and
Nominating Committees

Our
board of directors also is of the view that it is appropriate for us not to have a
standing compensation nor nominating committees because there are currently only three
directors on our board of directors, one of whom, Mr. Dan Elnathan is an independent
director under the rules of the National Association of Securities Dealers, Inc.
Furthermore, we are currently quoted on the OTC Bulletin Board, which is sponsored by the
National Association of Securities Dealers, Inc., under the symbol ACRI  and
the OTCBB does not have any listing requirements mandating the establishment of any
particular committees. These directors have performed and will perform adequately the
functions of a nominating and compensation committees. There has not been any defined
policy or procedure requirements for stockholders to submit recommendations or nomination
for directors. Our board of directors does not believe that a defined policy with regard
to the consideration of candidates recommended by stockholders is necessary at this time
because we believe that, given the early stages of our development, a specific nominating
policy would be premature and of little assistance until our business operations are at a
more advanced level. The process of identifying and evaluating nominees for director is
conducted by our board of directors Based on the information gathered, our board of
directors then makes a decision on whether to recommend the candidates as nominees for
director. We do not pay any fee to any third party or parties to identify or evaluate or
assist in identifying or evaluating potential nominee.

On
March 7, 2007, we established an audit committee, and appointed Dan Elnathan, who
qualifies as a financial expert, under the rules of National Association of Securities
Dealers, Inc., as a sole member of this committee.

21

---

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# Item 10. Executive
Compensation

The
following table sets forth certain compensation paid or accrued to former and current
officers during the fiscal years ended December 31, 2006 and 2005.

|                                                | SUMMARY COMPENSATION TABLE
|----------------------------------------------- | --------------------------
|
|
|
|
|Gadi Aner(1)                                    |                           
|Chief Executive
Officer and
Chairman            |                           
|                                                |                           
|Yami Tarsi(3)                                   |                           
|                                                |                           
|Jacob Bar
Shalom Acting
Chief Financial
Officer |                           
|                                                |                           

(1) On December 31, 2006, Gadi Aner was appointed to serve as our Interim Chief Executive Officer.

(2) Charged for consulting services performed.

(3) On December 31, Yami Tarsi ceased to serve as our Chief Executive Officer of ACRO.

(4) The amount paid either directly
to Jacob Bar-Shalom or to an outsourced company that hired Mr. Bar-Shalom to perform his
position as acting Chief Financial Officer

Outstanding Equity Awards at Fiscal Year-End

We have not granted any stock options since inception.

Compensation of Directors

The
following table sets forth the compensation of our directors for the fiscal year ended
December 31, 2006:

|Name(1)      | Fees
Earned or
Paid in
Cash
($) | Stock
Awards
($) | Option
Awards
($) | Non-Equity
Incentive Plan
Compensation
(#) | Nonqualified
Deferred
Compensation
Earnings
($) | All Other
Compensation ($) | Total
($)
|------------ | ------------------------------- | ---------------- | ----------------- | ------------------------------------------ | ----------------------------------------------- | -------------------------- | ---------
|
|
|
|
|Ehud Keinan  |                                 |                  |                   | -                                          |                                                 |                            | -        
|Dan Elnatahn |                                 |                  |                   | -                                          |                                                 |                            | -        

|(1) The compensation of Gadi Aner, our director and Interim Chief Executive
                    Officer, is fully reflected in the Summary Compensation Table above.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------

(2)
          Charged by BioTech Knowledge LLC., a private company wholly-owned by Ehud
          Keinan, for consulting services performed.

22

---

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# Item 11. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholders

# Securities Authorized
for Issuance Under Equity Compensation Plans

We do not currently, nor have we had
since inception, an equity compensation plans.

# Security Ownership of
Certain Beneficial Owners and Management

The
following table sets forth certain information concerning the number of shares of our
common stock known by us to be owned beneficially as of March 23, 2007 and the date hereof
by: (i) each person (including any group) that owns more than 5% of any class of the
voting securities of our company; (ii) each director and officer of our company; and (iii)
directors and officers as a group. Unless otherwise indicated, the stockholders listed
possess sole voting and investment power with respect to the shares shown.

|Title of Class | Name and Address of
Beneficial Owner | Amount and Nature of
Beneficial Ownership | Percentage
of Class(1)(2)                                      
|-------------- | ------------------------------------ | ----------------------------------------- | ---------------------------------------------------------------
|
|
|
|
|Common Stock   |                                      |                                           | Dr. Ehud Keinan                                                
|               |                                      |                                           | 10550 North Torrey PinesRoadMB-20, La JollaCA 92037            
|Common Stock   |                                      |                                           | Gadi Aner                                                      
|               |                                      |                                           | P.O. Box 18                                                    
|               |                                      |                                           | Timrat, 23840                                                  
|               |                                      |                                           | Israel                                                         
|Common Stock   |                                      |                                           | Zeev Bronfeld
6 Ori Street
Tel Aviv, 65654
Israel              
|Common Stock   |                                      |                                           | Dan Elnathan                                                   
|               |                                      |                                           | 45 Nof Harim St.,                                              
|               |                                      |                                           | Mevaseret Zion, 90805 Israel                                   
|Common Stock   |                                      |                                           | Jacob Bar Shalom
11 Simtat Vered, Ramat
Hasharon, 47249, Israel
|Common Stock   |                                      |                                           | Directors and Officers (as                                     
|               |                                      |                                           | a group) (4 people)                                            

(1)
          Regulation S-B under the Exchange Act, defines a beneficial owner of a security
          as: (a) any person who, directly or indirectly, through any contract,
          arrangement, understanding, relationship, or otherwise, has or shares: (i)
          voting power, which includes the power to vote, or to direct the voting of
          shares; and (ii) investment power, which includes the power to dispose or direct
          the disposition of shares; (b) any person who, directly or indirectly, create or
          uses a trust, proxy, power of attorney, pooling arrangement or any other
          contract, arrangement or device with the purpose or effect of divesting such
          person of beneficial ownership of a security or preventing the vesting of such
          beneficial ownership. Certain shares may be deemed to be beneficially owned by
          more than one person (if, for example, persons share the power to vote or the
          power to dispose of the shares). In addition, shares are deemed to be
          beneficially owned by a person if the person has the right to acquire the shares
          (for example, upon exercise of an option) within 60 days of the date as of which
          the information is provided. In computing the percentage ownership of any
          person, the amount of shares outstanding is deemed to include the amount of
          shares beneficially owned by such person (and only such person) by reason of
          these acquisition rights. As a result, the percentage of outstanding shares of
          any person as shown in this table does not necessarily reflect the persons
          actual ownership or voting power with respect to the number of shares of common
          stock actually outstanding on March 23, 2007, and the date of this Information
          Statement.

23

---

---



(2)
          Based upon 67,131,686 issued and outstanding shares of common stock as of March
          23, 2007 and as of the date of this current report.

(3) The shares are
registered under BioTech Knowledge LLC, which is wholly owned by Dr. Ehud Keinan.

(4) The shares include 2,800,000 shares registered under M.G-NET LTD., which is wholly owned by Mr. Gadi
Aner and his wife.

# Item 12. Certain
Relationships and Related Transactions, and Director Independence Transactions With Related
Persons, Promoters and Certain Control Persons

Transactions with Related
Persons

Other
than as disclosed below, during the fiscal year ended December 31, 2006, none of our
current directors, officers or principal shareholders, nor any family member of the
foregoing, nor, to the best of our information and belief, any of our former directors,
senior officers or principal shareholders, nor any family member of such former directors,
officers or principal shareholders, has or had any material interest, direct or indirect,
in any transaction, or in any proposed transaction which has materially affected or will
materially affect us.

On
January 19, 2006, we closed a private placement consisting of 20,200,012 shares of common
stock for total gross proceeds of $ 43,286 in the form of a promissory note payable upon
demand, in which two of our current directors, Gadi Aner and Ehud Keinan, who were not
directors at that time, and Zeev Bronfeld, beneficial owner of more than 5% of our common
stock participated. Pursuant to the private placement, we issued, among others: (i)
2,300,004 shares of common stock to Gadi Aner for a total consideration of US$4,929; (ii)
2,800,000 Shares to M.G-Net Ltd., a private company, wholly-owned by Mr. Aner and his
wife, for a total consideration of US$6,000; and (iii) 6,400,002 shares of common stock to
BioTech Knowledge LLC, a private company wholly-owned by Ehud Keinan, for a total
consideration of $13,714. In addition, pursuant to a share purchase agreement dated
January 10, 2006, two of our former directors, Nick DeMare and Brad Colby, sold their
entire interests in Acro, 14,000,000 shares of common stock, to BioTech Knowledge LLC. As
a result of these two transactions, BioTech Knowledge LLC is our largest stockholders with
approximately 30.38% of our common stock.

On
February 1, 2006, we signed a consulting services agreement with BioTech Knowledge LLC a
private company wholly-owned by Ehud Keinan, one of our directors and a beneficial owner
of 20,400,002 shares of common stock. Pursuant to the agreement we pay to BioTech
Knowledge LLC $3,000 each month for consulting services provided by Dr. Keinan.

On
March 15, 2006, we entered into an employment agreement with Gadi Aner, for the purpose of
providing services of Chairman of our Board of Directors and the services of Chief
Executive Officer, when required. During 2006, we paid to M.G-NET Ltd., a private company,
wholly-owned by Mr. Aner and his wife an aggregate amount of $55,718 for the services and
expenses of Mr. Aner. We agreed to terminate that agreement effective as of April 1, 2007.
Our subsidiary entered into an agreement with M.G-NET Ltd., a private company,
wholly-owned by Mr. Aner and his wife, to be effective on April 1, 2007, under which
M.G-NET agreed to provide to our subsidiary and to us of Gadi Aner as Chairman of our
Board of Directors and as Chief Executive Officer, when required. Pursuant to the
agreement, our subsidiary agreed to pay M.G-NET $5,280 (plus value added tax) per month
for the services of a Chairman, and additional $5,280 (plus value added tax) per month for
services of Chief Executive Officer. We also agreed to have M.G-NET use a company car.

Pursuant
to the terms of the Patent Purchase Agreement, we paid $120,000 to purchase the patent
registered in the U.S. Patent Office under U.S. Patent No. 6,767,717 from Dr. Keinan, one
of our directors and a beneficial owner of 20,400,002 shares of our common stock.

On
March 7, 2007, we entered into a service agreement with our subsidiary, pursuant to which
our subsidiary, provides us research and development, manufacturing, marketing and
management services, in consideration for the costs of such services plus an interest in
the range of 0%-10%, based on the service provided.

24

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Parents

None.

Transaction with Promoters

Note applicable.

Directors Independence

Our
only director that is independent, is Dan Elnathan. Our chairman of the board of
directors, Gadi Aner is an officer, and Ehud Keinan is a controlling shareholder and
therefore they both disqualify as independent directors. The determination of independence
of directors has been made using the definition of independent director
contained under Rule 4200(a)(15) of the Rules of National Association of Securities
Dealers.

# Item 13. Exhibits

Exhibits
are as set forth in the section entitled Exhibit Index which follows the
section entitled Signatures in this Annual Report on form 10-KSB. Exhibits
which are incorporated by reference herein can be inspected and copied at the public
reference rooms maintained by the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. SEC filings are also available to be public at
the website of the SEC at http://www.sec.gov.

# Item 14. Principal
Accountant Fees and Services

Audit Fees

For
the fiscal year ended December 31, 2006, Somekh Chaikin a member firm of KPMG
International is expected to bill approximately $40,000 for the audit of our annual
financial statements and review of our Form 10-KSB. For the fiscal year ended December 31,
2005, Gordon, Hughes & Banks, LLP billed approximately $10,000 for the audit of our
annual financials statements and review of our Form 10-KSB.

Tax Fees

For
the fiscal year ended December 31, 2006, Somekh Chaikin a member firm of KPMG
International is expected to bill approximately $5,000 for tax compliance, tax advice and
tax planning services. For the fiscal year ended December 31, 2005, Gordon, Hughes &
Banks, LLP billed $15,000 for these services.

All Other Fees

We
do not use Somekh Chaikin for financial information system design and implementation.
These services, which include designing or implementing a system that aggregates source
data underlying the financial statements or generates information that is significant to
our financial statements, are provided internally or by other service providers. We do not
engage Somekh Chaikin to provide compliance outsourcing services. Effective May 6, 2003,
the Securities and Exchange Commission adopted rules that require that before Somekh
Chaikin is engaged by us to render any auditing or permitted non-audit related service,
the engagement be:  approved by our audit committee (which consists of our entire
Board of Directors); or  entered into pursuant to pre-approval policies and
procedures established by the audit committee, provided the policies and procedures are
detailed as to the particular service, the audit committee is informed of each service,
and such policies and procedures do not include delegation of the audit committees
responsibilities to management. The audit committee pre-approves all services provided by
our independent auditors. The pre-approval process has just been implemented in response
to the new rules, and therefore the audit committee does not have records of what
percentage of the above fees were pre-approved. However, all of the above services and
fees were reviewed and approved by the audit committee either before or after the
respective services were rendered. The audit committee has considered the nature and
amount of fees billed by Somekh Chaikin and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining Somekh Chaikins
independence.

25

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# SIGNATURES

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

| |  | ACRO INC.By: /s/ Gadi Aner
Gadi AnerInterim Chief Executive Officer
| |  | ---------------------------------------------------------------------------------

Date: March 28, 2007

26

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# Exhibit Index

|                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number
3.1 
3.2 
3.3 
3.4 
3.5 
10.1 
10.2 
10.3 
10.4 
10.5 
10.6 
10.7 
10.8 
10.9 
10.10 
10.11 
14.1 
16.1 | Description
Articles of Incorporation, as amended. 
Bylaws, dated February 25, 2005. 
Certificate of Change Pursuant to NRS 78.209 
filed with the State of Nevada effective as of
January 25, 2006.
Certificate of Change Pursuant to NRS 78.209 
filed with the State of Nevada effective as of
October 25, 2006.
Certificate of Change Pursuant to NRS 78.209 
filed with the State of Nevada effective as of
October 30, 2006.
Agreement and Plan of Merger for the Merger of
ACRO Inc. with and into Medina International 
Corp., dated April 25, 2006. 
Finder's Fee Agreement between the Registrant 
and David Sidoo, dated March 8, 2005. 
Patent Purchase Agreement between the 
Registrant and Prof. Ehud Keinan, dated 
February 1, 2006. 
Consulting Agreement between the Registrant 
and BioTech Knowledge LLC, dated February 1, 
2006. 
Letter of Agreement between the Registrant and
BioTech Knowledge LLC, dated February 1, 2006.
Advisory Board Agreement between the 
Registrant and Mr. Ehud Barak.
Advisory Board Agreement between the 
Registrant and Prof. Richard E. Lerner, dated 
May 31, 2006. 
Advisory Board Agreement between the 
Registrant and Prof. K. Barry Sharpless, dated
September 28, 2006.
Finders Agreement between the Registrant and 
Siden Investment Inc. dated February 1, 2007.
Consulting Agreement between Acrosec Ltd. and 
M.G NET Ltd., dated March 26, 2007
Services Agreement between Acrosec Ltd. and 
the Registrant, dated March 7, 2007.
Code of Business Conduct and Ethics and 
Compliance Program 
Letter dated March 6, 2006 from Wheeler 
Wasoff, P.C. regarding change in independent 
accountant. | Method of Filing
Incorporated by reference to Exhibit 3.1 to
our registration statement on Form SB-2
filed November 21, 2003.
Incorporated by reference to Exhibit 3.1 to
our current report on Form 8-K filed March
17, 2005 and March 21, 2005
Filed herewith
Filed herewith
Filed herewith
Incorporated by reference to Exhibit 10.2 to
our current report on Form 8-K filed May 4,
2006
Incorporated by reference to Exhibit 10.2 to
our current report on Form 8-K filed March
17, 2005 and March 21, 2005
Incorporated by reference to Exhibit 10.1 to
current report on Form 8-K filed February
3, 2006
Incorporated by reference to Exhibit 10.2 to
our current report on Form 8-K filed
February 3, 2006
Incorporated by reference to Exhibit 10.3 to
our current report on Form 8-K filed
February 3, 2006
Filed herewith
Incorporated by reference to Exhibit 99.2 to
our current report on Form 8-K filed June
5, 2006
Filed herewith
Filed herewith
Filed herewith
Filed herewith
Incorporated by reference to Exhibit 14.1 to
our Form 10-KSB for the year ended December
31, 2004, filed on March 30, 2005
Incorporated by reference to Exhibit 16.1 to
our current report on Form 8-K/A filed
March 6, 2006

27

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|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                            
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|16.2  
31.1  
31.2  
32.1  
32.2 | Letter dated May 12, 2006 from Gordon, Hughes 
& Banks, LLP regarding change in independent  
accountant.                                   
Rule 13a-14(a) Certification of Principal     
Executive Officer
Rule 13a-14(a) Certification of Principal     
Financial Officer. 
Certification of Principal Executive Officer  
Pursuant to 18 U.S.C. Section 1350, as
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.  
Certification of Principal Financial Officer  
Pursuant to 18 U.S.C. Section 1350, as
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. | Incorporated by reference to Exhibit 16.1 to
 our current report on Form 8-K filed May
15, 2006
Filed herewith
Filed herewith
Filed herewith
Filed herewith

28

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