**UNITED STATES**

**Securities and Exchange Commission**

**Washington, D. C.  20549**

 

** **

**FORM10-QSB/A**

 

 

[**X**]  **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

                                          **For the quarterly period ended  September 30, 2007**

** **

 

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

 

                                         For the transition period from        to 

                                                                         ------   --------- 

 

                                         Commission File No.   **000-50678**

**                                                              -------------**

 

**ACORN ACQUISITION CORP.**

---------------------------------------------------------------------------------------------

(Exact name of small business issuer as specified in its charter)

 

| **DELAWARE**             | **  20-5622985**          |
|--------------------------|-------------------------------------|
| (State of incorporation) |  (IRS Employer Identification) |

 

**1035 Park Avenue, Suite 7B, New York, New York10028-0912**

---------------------------------------------------------------------------------------------

(Address of principal executive offices)

 

 

**(646)827-9362**

---------------------------------------------------------------------------------------------

(Issuer's telephone number)

 

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

                                                                            Yes ** X**     No   

                                                                                 ----       ---

      

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). 

                                                                           Yes  **X**    No 

                                                                                 ----       ---

          

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

 

Not applicable.

 

 

**APPLICABLE ONLY TO CORPORATE ISSUERS**

 

State the number of shares outstanding of each of theissuer's classes of common equity, as of the latest practicable date (January 30, 2008): 1,372,574.

 

Transitional Small Business Disclosure Format (check one):  Yes    No **X**

                                                              ---   --- 

 

Page 1

**TABLE OF CONTENTS**

 

**PART I- FINANCIAL INFORMATION**

 

**Item 1.   Financial Statements.**

                                                                                   Page

                                                                                  Numbers

       Consolidated Condensed Statements of Financial Condition

         as of September 30, 2007 (Unaudited)                                         3

 

      Consolidated Condensed Statements of Operations for the three and

         nine months September 30, 2007 and 2006(Restated) and for the period from

        reactivation (March 26, 2001) through September 30, 2007 (Unaudited)          4

 

      Consolidated Condensed Statements ofStockholders' Deficit

         For the Period From Reactivation (March  26, 2001) through 

         September 30, 2007 (Unaudited)                                               5

  

       Consolidated Condensed Statements of Cash Flows for the nine months ended 

        September 30, 2007 and 2006 and for the period from Reactivation 

        (March 26, 2001) through September 30, 2007 (Unaudited)                       6

 

       Notes to Consolidated Condensed Financial Statements (Unaudited)               7

 

 

**Item 2.   Management's Discussion and Analysis or Plan of Operation.**                  14

 

**Item 3.   Controls and Procedures.**                                                   14

 

**PART II OTHER INFORMATION**

** **

**Item 1.   Legal Proceedings**                                                          15

** **

**Item 2.   Unregistered Sales of Equity Securities and Use of****Proceeds**                 15

 

**Item 3.   Defaults upon Senior Securities**                                             15

 

**Item 4.   Submission of Matters to a Vote of Security Holders**                        15

 

**Item 5.   Other Information**                                                           15

 

**Item 6.   Exhibits and Reports on Form8-K**                                            15

 

**                                          Signatures                                  **15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 2

**Part I- Financial Information**

** **

** **

**Item 1.  Financial Statements.**

 

                            

 

 

 

**Acorn Acquisition Corp. and Subsidiary**

**[A Development Stage Company]**

**Condensed Consolidated Balance Sheet**

**September 30, 2007**

**(Unaudited)**

 

 

ASSETS

 

 

Current Assets:      

Cash and cash equivalents                              $8,211

 

TOTAL ASSETS                                             $8,211

      

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

Current Liabilities: 

           

Accounts Payable                                      $54,490

AccountsPayable-Related Party                        129,816

 

          Total Current Liabilities                $184,306

          

     

Stockholders' Deficit:          

Common stock                                              137

Additional paid in capital                            969,268

Deficit accumulated prior to developmental stage     (751,491)

Accumulated deficit during development stage      (394,009)

Total Stockholders' Deficit                 (176,095)

                                                

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $8,211

      

 

 

 

The accompanying notes are integral parts of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 3

 

**Acorn Acquisition Corp. and Subsidiary**

**[A Development Stage Company]**

**Condensed Consolidated Statements of Operations**

**(Unaudited)**

** **

                                      For the Nine Months Ended           Reactivation 

                                            September 30,              (March 26, 2001) To,

                                          2007             2006         September 30,2007 

                                                       (Restated)

 

Revenues                               $     0          $    0         $       0    

               

General and administrative 

   expense                               138,517           87,959            392,710

                           

Operating Loss                          (138,517)         (87,959)         ( 392,710) 

               

Income taxes                               0                  44              1,298 

 

Net Loss                               $(138,517)        $(88,003)         $(394,008)

                                                                                     

Net Loss per Share

  Basic and diluted                     $( 0.10 )        $(0.06 ) 

                                                                  

Weighted Average Number of Shares

  Outstanding, Basic and Diluted       1,372,574        1,372,574   

                                                                 

 

 

 

 

                                      For the Three Months Ended     

                                            September 30,                     

                                          2007             2006      

                                                       (Restated)

 

Revenues                               $     0          $    0       

               

General and administrative 

   expense                               77,512            56,840         

                           

Operating Loss                          (77,512)          (56,840)          

               

Income taxes                              0                  0         

                           

Net Loss                               $(77,512)         $(56,840)

                                                                                                                   

Net Loss per Share

  Basic and diluted                    $( 0.06 )         $(0.04 )

                                                                                                                   

Weighted Average Number of Shares

  Outstanding, Basic and Diluted      1,372,574         1,372,574

                                                                                                                  

 

 

The accompany notes are integral parts of these financial statements. 

  

  

  

  

  

  

  

  

  

Page 4

**Acorn Acquisition Corp. and Subsidiary**

**[A Development Stage Company]**

**Consolidated Statements of Stockholders' Deficit**

**For the period from Reactivation [March 26, 2001] through September 30, 2007**

**(Unaudited)**

 
 

Number ofShares

Common

Stock

AdditionalPaid-in

Capital

DeficitAccumulated

During Development

Stage

TotalStockholders' Deficit

Balance,March 26, 2001 

142,800,000 

$14,280 

$735,211 

$(751,491)

$(2,000)

Reverse      split shares: 1 for 1,428, 4/2/01  

(142,326,538)

(14,233)

14,233 

0 

 1for 10, 10/1/06 

(425,888)

(43)

43 

0 

Issued stock for expenses, at $.002 per share   

925,000  

93  

17,907  

18,000  

Net loss for 2001 

 

 

 

 (18,100)

(18,100)
                              
Balance, December 31, 2001 

972,574 

97 

767,394 

(769,591)

( 2,100)

Issued stock for expenses, at $.002 per share  

400,000  

40  

7,960  

8,000  

Net loss for 2002 

 

 

 

 ( 9,205)

( 9,205)

 

Balance, December 31, 2002 

1,372,574 

137 

775,354 

(778,796)

(3,305)

Net loss for 2003 

 

 

 

 ( 14,695)

(14,695)

 

Balance, December 31, 2003 

1,372,574 

137 

775,354 

(793,491)

(18,000)

Net Loss for 2004 

 

 

 

 ( 24,150)

(24,150)

 

Balance, December 31, 2004  

1,372,574 

137 

775,354 

(817,641)

(42,150)

Net Loss for 2005 

 

 

 

 ( 20,564)

(20,564)

 

Balance, December 31, 2005 

1,372,574 

137  

775,354 

(838,205)

(62,714)

Assumption of liabilities by stockholder  

93,914 

93,914 

Net Loss for 2006  

 

 

 

 (168,778)

(168,778)

 

Balance, December 31, 2006  

1,372,574 

137  

869,268 

(1,006,983)

(137,578)

Increase in Additional Paid in Capital due toStock Subscription payable (Unaudited)  

100,000  

100,000  

Net Loss for the Nine Months Ended September 30, 2007 (Unaudited) 

 

 

 

 (138,517)

 (138,517)

 

Balance, September 30, 2007 (Unaudited) 

 1,372,574 

$ 137   

$969,268  

$(1,145,500)

$(176,095)

The accompanying notes are integral parts of these financial statements.

 

 

Page 5

 

**Acorn Acquisition Corp. and Subsidiary**

** [A Development Stage Company]**

**Condensed Consolidated Statements of Cash Flows**

**(Unaudited)**

 

                                                   For the Nine             Reactivation

                                                  Months Ended          (March 26, 2001) To

                                                   September 30,          September 30, 2007

                                                  2007       2006                    

 

Cash Flows Provided 

  By Operating Activities:

 

  Net loss                                     $(138,517)   $(88,003)          $(394,009)

  Adjustments to reconcile net

loss to net cash used for

operating activities:   

  Stock issued for services rendered                0           0                26,000

  Increase (decrease) in cash flows

   as a result of changes in asset

   and liabilities account balances:                    

    Accounts Payable                              13,240    (33,715)             52,490

    AccountsPayable-Related Party                46,596     27,474             129,816

    Income Taxes Payable                            (755)      0                   0    

 

Net Cash Flows Used In Operating Activities      (79,436)   (94,244)           (185,703)

 

Cash Flows Provided by Financing Activities:

 

Proceeds from stock subscription                  50,000        0              1,000,000

Stock subscriptions refunded                    (900,000)       0              (900,000)

Cash in escrow                                   937,647        0                   0    

Assumption of liabilities by Stockholder            0        93,914              93,914 

 

Cash Flows Provided by Financing Activities       87,647     93,914             193,914 

 

Net Increase (Decrease) in Cash                    8,211       (330)              8,211 

 

Beginning Cash Balance                              0           330               0    

 

Ending Cash Balance                            $  8,211     $  0             $   8,211

                                                                                        

 

Supplemental Disclosures:           

  Cash paid for interest                         $ 0          $ 0                   $ 0  

                                                                                        

  Cash paid for income taxes                    $755         $ 0               $1,055  

                                                                                        

  Stock issued for services                      $ 0         $ 0              $26,000

                                                                                        

 

 

 

 

The accompanying notes are integral parts of these financial statements.

 

 

 

 

 

 

Page 6

**Acorn Acquisition Corp. and Subsidiary**

** [A Development Stage Company]**

**Notes to Condensed Consolidated Financial Statements**

**September 30, 2007**

**(Unaudited)**

 

**NOTE A- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

**Company Background**

 

Acorn Acquisition Corp. (the"Company") was incorporated under the laws of the state of Delaware on July 20, 2006 by its then parent, Syntony Group, Inc.  The Company was formed to enable Syntony Group, Inc. to merge into the Company thus effecting a reincorporation in Delaware.  The merger was effective on October 1, 2006, and provided for each ten shares of Syntony Group, Inc. to become one share of the Company.  The accompanying financial statements retroactively reflect all stock splits as at the beginning of the periods presented.

 

Syntony Group, Inc. was incorporated under the laws of the State of Utah on December 12, 1980 as Puma Energy, Inc.  In 1981 the Company's focus was the development of oil and gas wells.  However, by 1987, the Company had depleted all assets and became inactive.  On June 8, 1989 the Company changed its name to Syntony Group, Inc. The Company then changed its purpose to developing and marketing a proprietary cosmetic.  However, failing to obtain approval from the United States Food and Drug Administration, the Company abandoned these planned operations and became dormant.  In March of 2001, the Company reactivated and amended its bylaws to reflect that the provisions of the Utah Control Share Acquisition Act should not apply to the Company.

 

Syntony Group, Inc. is in the development stage and is developing its planned principal operations. In July 2005 Syntony Group formed itswholly-owned subsidiary, Syntony Acquisition Corp. ("Subsidiary"), under the laws of the State of Nevada.  1,000 shares were issued at a par value for $1.00.  Subsidiary was formed for the sole purpose of merging with another company.

 

The financial statements of the Company have been prepared in accordance with accountingprinciples generally accepted in the United States of America.  The following summarizes the more significant of such policies:

 

**Principles of Consolidation**

 

The accompanying consolidated financial statements as at and for the periods ended September 30, 2007 and 2006 include the accounts of the Company and Subsidiary.  All significant intercompany balances and transactions have been eliminated.  The accompanying financial statements for the period from Reactivation (March 26, 2001) through September 30, 2007 include the accounts of the Company and itswholly-owned subsidiary from its date of incorporation in July 2005 to September 30, 2007.

 

**Basis of Presentation**

 

The accompanying unaudited interim consolidated financial statements as of September 30, 2007, for the nine and three months ended September 30, 2007 and 2006, and for the period from Reactivation (March 26, 2001) through September 30, 2007 have been prepared in accordance with accounting principles generally accepted for interim financial statements presentation and in accordance with the instructions to RegulationS-B.  Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation.  In the opinion of management, the financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated financial position as of September 30, 2007, the consolidated results of operations for the nine and three months ended September 30, 2007 and 2006 and for the period from Reactivation (March 26, 2001) through September 30, 2007 and consolidated cash flows for the nine months ended September 30, 2007 and 2006 and for the period from Reactivation (March 26, 2001) through September 30, 2007.  The results of operations for the nine and three months ended September 30, 2007 and 2006 are not necessarily indicative of the results to be expected for the full year.  This information  should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2006 included in the Company's Form10-KSB as filed with the Securities and Exchange Commission.  There have been no changes in significant accounting policies since December 31, 2006.

 ** **

Page 7
****
**Use of Estimates**

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates. Significant estimates made by management include the valuation of the deferred tax asset allowance.

 

**Fair Value of Financial Instruments**

 

The amounts at which assets and liabilities are presented approximate their fair value due to theirshort-term nature.

** **

**Income Taxes**

 

The Company follows the provisions of Statement of Financial Accounting Standards Board No. 109, "Accounting for Income Taxes," which requires the use of the liability method of accounting for income taxes.  The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements.  The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur.  A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.  At September 30, 2007, the entire deferred tax asset, which arises from the Company's net operating loss carry forwards, has been fully reserved  because management has determined that it is not more likely than not that the net operating loss carry forwards will be realized in the future.

 

**Loss Per Common Share**

 

The Company has adopted Statement of Financial Accounting Standards No.128, "Earnings Per Share", which modified the calculation of earnings per share ("EPS"). Basic EPS is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS includes the dilution of common stock equivalents, and is computed similarly to fully diluted EPS pursuant to Accounting Principles Board (APB) Opinion 15.

 

Basic loss per common share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding.  The Company did not have any warrants, options or other common stock equivalents outstanding during the nine and three months ended September 30, 2007 and 2006.  Accordingly, basic and dilutive loss per share are the same for the Company.

 

                               Nine Months Ended        Three Months Ended

                                  September 30,           September 30,    

                                2007        2006           2007     2006 

                                        (Restated)              (Restated)

 

   Basic                      $(0.10)    $(0.06)         $(0.06)   $(0.04)

                                                                           

   Diluted                    $(0.10)    $(0.06)          $(0.06)  $(0.04)

                                                                           

 

**Recent Accounting Pronouncements**

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

 

**NOTE B- ACQUISITION OF LUMEN MEDICAL, INC.**

** **

On October 1, 2007, the Company entered into an Agreement and Plan of Merger with Lumen Medical, Inc. ("Lumen"). The Merger Agreement provides for a business combination whereby Lumen will be merged with and into the Company in accordance with the terms of the Merger Agreement, with the Company continuing as the surviving corporation (the 'Merger'). Pursuant to the Merger, the stockholders of Lumen will receive in exchange for all of the outstanding shares of the Company an aggregate of 51,250,000 shares of common stock, $0.0001 par value per share, of the Company.

 

Page8

 

Lumen was incorporated on February23, 2006 as a vehicle to invest in North American businesses. On July 27, 2006, Lumen identified PulmoScience, Inc. ("PulmoScience") as the subject for investment and during 2006 increased its ownership of PulmoScience to 51%. At September 30, 2007, Lumen's only assets were its 51% stake in PulmoScience and approximately $900,000 in cash. PulmoScience is a development stage biotechnology company that is developing a noninvasive Molecular Imaging for the diagnosis of Pulmonary Embolism, Pulmonary Hypertension, and Lung Inflammatory diseases. This new diagnostic methodology is called PulmoBind. PulmoBind uses an intravenously delivered radionucleide tagged molecule which specifically bonds to the inner walls of the circulatory system in the lungs, and by the use of an external Gamma Camera allows an image of the integrity of the blood vessels throughout the lungs to be seen by a diagnostic clinician.

 

PulmoScience is currently two thirds of the way through Canadian Regulatory Approval for Phase I Human Trials, and while subsequent results from additional tests might not corroborate the current results, PulmoScience believes that PulmoBind has the potential to dominate the market for the diagnosis of Pulmonary Embolism. In particular, this belief is driven by PulmoScience's expectations of the improved safety and efficacy that PulmoBind will offer when compared to the current incumbent nuclear medicine based technology for the diagnosis of Pulmonary Embolism. Because the PulmoBind Molecular Imaging technology uses standard radioisotope tracers and gamma cameras, every hospital in the world that has any sort of nuclear medicine facility will be able to carry out lung Molecular Imaging tests without having to invest in any new facilities. Given this, plus the improved patient safety and diagnostic effectiveness of PulmoBind, as well as its unique ability to noninvasively image conditions such as Pulmonary Hypertension, PulmoScience strongly believes that its PulmoBind Molecular Imaging technology will be an extremely successful product.

 

PulmoScience is currently owned 51% by Lumen with the remainder of the equity shared between Innovacor (a subsidiary of the Montreal Heart Institute) and Dr. Jocelyn Dupuis (the originator of the PulmoBind Molecular Imaging technology). Lumen has an option to increase its stake in PulmoScience to 61% with the payment of an additional $200,000. Lumen expects to exercise this option before the end of 2OO7. Lumen also has an option to purchase the 39% remaining minority interest in PulmoScience (the "***39% Option***") for 10,000,000 Canadian Dollars (the"***39% Option Price****"*).  If then a public company, Lumen has the option to pay the 39% Option Price in the form of its publicly traded shares having an aggregate market value equal to the 39% Option Exercise Price based on the weighted average price ofLumen's publicly traded shares during the 30-days preceding the exercise of the 39% Option converted into Canadian Dollars at the spot rate as published by the Bank of Nova Scotia on the last trading date immediately preceding the exercise of the 39% Option.

 

A significant stockholder of the Company, Tendall FZCO ("Tendall"), also owns approximately 57.9% of the common stock of Lumen. This stockholder has advised the Company that it intends to vote all of its shares of the Company and of Lumen in favor of the Merger and to approve the Merger Agreement, a vote sufficient to approve the Merger and the Merger Agreement. The Company and Lumen have made customary representations, warranties and covenants in the Merger Agreement, including a covenant by the Company not to solicit, initiate or encourage the submission of any proposal or offer from any person relating to the acquisition of all or substantially all of the capital stock or assets of the Company or PulmoScience.

 

The Merger Agreement contains, among other customary closing conditions, that the Company will file a registration statement on Form S−4 to register the shares of its common stock issuable pursuant to the Merger under the Securities Act of 1933.  On October 12, 2007, the Company filed a FormS-4 with the Securities and Exchange Commission and subsequently on November 6, 2007 received comments on the filing from the staff of the SEC to which the Company will respond in the near future.

 

The acquisition of Lumen will be accounted for as a"reverse acquisition" of the Company by Lumen. Because both the Company and Lumen are under common ownership, the assets and liabilities of Lumen will be recorded at their historical cost bases and the operations of Lumen will be reflected in the financial statements attheir historical amounts.

 

Therestated unaudited condensed consolidated financial statements of Lumen as at September 30, 2007, for the nine months ended September 30, 2007 and for the periods from February 23, 2006 (Inception) to September 30, 2006 and 2007 are as follows:

 

Page9

 

**Balance Sheet**

         As of September 30, 2007

 

Cash and cash Equivalents                           $   923,144 

Other current assets                                     34,788 

Total Assets                                 $   957,932 

                                                               

Current Liabilities                                     133,088 

Liability for Mandatory                                        

 Redeemable common shares                              395,699

Due to shareholder                                    1,177,484 

Minority Interests                                            0 

Total Liabilities                              1,706,271 

Common stock                                                  2 

Additional paid in capital                              900,998 

Accumulated deficit                                  (1,649,339)

   Stockholders' deficiency                         (  748,339)

Total Liabilities and                                    

 Stockholders' Deficiency                    $  957,932  

                                                         

 

**Statement of Operations**

 

                                 For The Period      For The Period

             For The Nine      February 23, 2006   February 23, 2006

             Months Ended      (Inception) to      (Inception) to

         September 30, 2007  September 30, 2006  September 30, 2007

            (Restated)           (Restated)         (Restated)

 

Revenues                             $     -          $     -             $      -   

 

Costs and expenses:

 Research and development               727,920           419,816             1,311,173 

 Write-down of a sublicense                -              676,854              676,854 

 General and administrative             341,119           75,555              509,693 

 Change in redemption amount

  of redeemable shares                      -              31,239                31,239  

 Total costs and expenses             1,069,039        1,203,464             2,528,959 

 

Canadian research and development

 investment tax credit               (   81,808)       (  35,990)          (  293,714)

 

Minority interest                    (  256,146)        ( 310,905)          (  585,906)

 

Net Loss                             ($731,085)        ($856,569)          ($1,649,339)

                                                                                        

 

**NOTE C- CAPITAL TRANSACTIONS**

** **

On April  2, 2001, the Company reverse split its common stock outstanding on the basis of one for 1,428 shares, while retaining the authorized shares and par value (the"2001 Stock Split"). There was a provision that no stockholder, on a per stock certificate of record basis, owning 100 or more shares shall be reduced to less than 100 shares as a result of the reverse split. Further, all fractional shares were rounded up to the nearest whole share, with the Company being authorized to issue such shares as are necessary for the rounding of fractions shares.  On October 1, 2006, the Board of Directors approved a reverse common stock split of one common share for every 10 common shares then outstanding through the process of reincorporation as described below (the"Reincorporation Stock Split"). All common shares and per share amounts retroactively reflect the 2001 Stock Split and the Reincorporation Stock Split as the date of the date of Reactivation, March 21, 2001.

 

In April 2001, the Company authorized and issued 925,000post-2001 Stock Split shares of common stock at $.002 per share to an officer for costs and expenses advanced on behalf of the Company.

 

In September 2002, the Company issued 4,000,000post-2001 Stock Split shares of common stock to an individual at $.002 per share for expenses and services rendered to the Company.

 

Page10

 

On October  1, 2006, Syntony Group, Inc. was merged into Acorn Acquisition Corp. The reincorporation reduced the number of authorized shares of Syntony Group, Inc. from 800,000,000 shares of Common Stock of Syntony Group, Inc. to 250,000,000 shares of Common Stock of Acorn Acquisition Corp. and reduced the number of issued shares of Common Stock from 13,723,462 to approximately 1,372,574 shares of Common Stock of Acorn Acquisition Corp.  All fractional shares were rounded up to the nearest whole share in the Reincorporation Stock Split.

 

By written consent dated July 20, 2006, the shareholders of theCompany's common stock, par value $.0001 per share, approved the reincorporation of the Company from the State of Utah to the State of Delaware. The reincorporation was effected pursuant to an Agreement and Plan of Merger, dated as of July 20, 2006 by and between the Company and Acorn Acquisition Corp., a Delaware corporation and awholly-owned subsidiary of the Company. On July 20, 2006 the Boards of Directors of the Company and Acorn Acquisition Corp. unanimously approved the Merger Agreement, and subsequently the Company, as sole shareholder of Acorn Acquisition Corp., and the holders of more than 90% of the shares of Common Stock outstanding on the Record Date (July 20, 2006) adopted the Merger Agreement by signing the written Consent of Shareholders.

 

Under the terms of the Merger Agreement, the issued and outstanding shares of common stock of Syntony Group, Inc. par value $0.0001 per share were converted on aone-for-ten basis into shares of Common Stock, par value $0.0001 of Acorn Acquisition Corp.  The Merger of Syntony Group, Inc. into Acorn Acquisition Corp. was effective October  1, 2006.

 

**Change in Ownership**

 

Effective June 30, 2006, theCompany's then controlling stockholder, Michael Vardakis ("Vardakis") entered into a Stock Purchase Agreement (the"Agreement") with David Price ("Price"), pursuant to which, among other things, Vardakis agreed to sell to Price and Price agreed to purchase from Vardakis, 1,234,500 shares of Common Stock of the Company owned of record and beneficially by Vardakis (the"Purchased Shares"). Under the terms of the Agreement, Price assigned all of his rights and obligations with respect to the Purchased Shares as follows: 1,232,500 shares to Tendall, a Dubai Free Zone corporation owned and controlled by Price; 1,000 shares to Alain U.Vetterli ("Vetterli"); 500 shares to Ian Ilsley ("Ilsley"); and 500 shares to Robert Lawrence Banner ("Banner").

 

Each of Price, Tendall,Vetterli, Ilsley and Banner is an "accredited investor" as such term is defined in Rule 501 of Regulation D promulgated by the Securities and Exchange Commission (the"Commission") under the Securities Act of 1933 (the "Securities Act"). The aggregate purchase price for the Purchased Shares was $600,000, or approximately $0.486 per share. The Purchased Shares represented approximately 90.0% of the 1,372,346 issued and outstanding shares of Common Stock. The purchase and sale of the Purchased Shares took place at a closing (the"Closing") held on June 30, 2006.

 

Effective June 30, 2006, Vardakis entered into an Installment Purchase Agreement (the"Installment Agreement") with Price, pursuant to which, among other things, Vardakis agreed to sell to Price and Price agreed to purchase fromVardakis, an additional 60,000 shares of Common Stock of the Company owned of record and beneficially by Vardakis (the"Installment Shares"). Under the terms of the Installment Agreement, Price assigned all of his rights and obligations under the Installment Agreement with respect to the Installment Shares to Jockey Holdings LTD, A British West Indies corporation ("Jockey"). Jockey is an accredited investor. The aggregate purchase price for the Installment Shares was $300,000, or $5.00 per share. The Installment Shares represented approximately 4.4% of the1,372,574 issued and outstanding shares of Common Stock. The Installment Agreement provides that the purchase price for the Installment Shares will be paid in 12 consecutive monthly installments, without interest, commencing on October 31, 2006, and on the last day of each month thereafter through and including September 30, 2007. If any such date is not a business day, the installment will be due on the following business day. There are a series of conditions to the purchase and sale of the Installment Shares, including: (i) Vardakis putting the Installment Shares and 30,000 additional shares of Common Stock owned of recorded and beneficially by Vardakis into escrow pursuant to an Escrow Agreement (the"Escrow Agreement") among Vardakis, Price, Jockey and Hirshfield Law, as Escrow Agent, to ensureVardakis' performance under the Installment Agreement; and (ii) Price putting 200,000 of the Purchased Shares into escrow pursuant to the Escrow Agreement to ensure the performance ofPrice's assignee under the Installment Agreement.

 

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Another condition of the Agreement was that Vardakis was to assume all liabilities of the Company as at June 30, 2006. The purchase price for the Purchased Shares was placed in escrow and all liabilities of the Company as at June 30, 2006 were paid by the escrow agent on behalf of Vardakis.  The liabilities paid by the escrow agent were comprised of legal and accounting fees and stock transfer agent fees that aggregated $64,334.  Additionally, the escrow agent paid Vardakis $28,580 for non interest bearing advances made by Vardakis to the Company.

 

In December 2006, the Company commenced a private placement of its common stock to twenty accredited investors. Each could subscribe for 1,000,000 shares of theCompany's post-Reincorporation Stock Split common stock for $50,000, $0.05 per share, subject to acceptance by theCompany's Board. Nineteen investors remitted the purchase price to the Company by December 31, 2006 and the twentieth in January 2007. The Company accepted all twenty subscriptions in January 2007 and, pursuant to Rule 419 under the Securities Act of 1933, agreed to place in escrow pursuant to the terms of Rule 419 the proceeds of the private placement and the 20,000,000 shares of common stock subscribed for. Under the terms of the subscription agreement, the investors were entitled to demand a refund of their investment less administrative costs of the Company but in no case less than 90% of their investment.In July 2007 the Company and the investors agreed that the stock subscriptions were tobe refunded and these investors were paid $900,000 in the aggregate and their subscriptions were cancelled.  The difference between the original escrowed amount of $1,000,000 and the amount refunded was credited to additionalpaid-in capital.

 

**NOTE D- RELATED PARTY TRANSACTIONS**

 

A former shareholder had paid expenses on behalf of the Company in the amounts of $2,000 during the year ended December 31, 2002, $11,951 during the year ended 2003, $5,350 during 2004 and $9,289 during 2005.  In conjunction with the June 30, 2006 Stock Purchase Agreement (see NoteC), the Selling Stockholder assumed the outstanding related party liability of $28,580 and liabilities of $64,332 to third parties. The assumed liabilities of $93,914 were credited to Additional Paid in Capital as at June 30, 2006.

 

Tendall made unsecured non interest bearing demand advances of $83,220 during 2006 and $46,596 during the nine months ended September 30, 2007 for the payment of expenses. The entire balance of $129,816 is outstanding as of September 30, 2007.

 

**NOTEE - RESTATEMENT**

 

**ACORNACQUISITION CORP**

 

Theunaudited interim condensed consolidated statements of operations for the nineand three months ended September 30, 2006 have been restated.  The originalfiling on form 10-QSB erroneously reported the actual unaudited results ofoperations for the nine and three months ended September 30, 2005 as theunaudited results of operations for the corresponding interim 2006periods.  A tabular comparison of the originally reported results of operationsto the rested actual results of operations for the nine and three months endedSeptember 30, 2006 is as follows:

 
 
For the Nine Months Ended September 30, 2006 
For the Three Months Ended September 30, 2006 As Originally ReportedRestatedAs Originally ReportedRestatedRevenues$      - $           -  $      - $      - General and administrative expense12,312 87,959 3,691 56,840 Operating Loss(12,312)(87,959)(3,691)(56,840)Income taxes- 44 - - Net loss$(12,312)$(88,003)$(3,691)$(56,840)Net loss per share - basic and diluted$(0.01)$(0.06)$(0.00)$(0.04)Weighted average number of shares      outstanding - basic and diluted1,372,574 1,372,574 1,372,574 1,372,574 
 

Therestatement of the unaudited interim statements of operations for the nine andthree months ended September 30, 2006 had no other effect on the originallyfiled quarterly report as filed on Form 10-QSB for the period ended September30, 2007.  The originally filed Form 10-QSB for

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September 30, 2006 includedthe correct statement of operations for the three and nine months then ended andrequired no restatement. 

 

**LUMENMEDICAL INC.**

 

Theunaudited interim condensed consolidated statements of operations for the ninemonths ended September 30, 2007 and for the periods from February 23, 2006(Inception) to September 30, 2006 and 2007 have been restated.  Theoriginal filing on Form 10-QSB for the period ended September 30, 2006 did notproperly include the charge to operations for the value attributed to shares ofLumen's majority owned subsidiary's common stock issued for acquired researchand development costs in July 2006.  The originally reported results ofoperations for the nine months ended September 30, 2007 were adjusted forresearch costs that belonged in the period ended December 31, 2006.  Therestatement to the results of operations for the period from Inception toSeptember 30, 2007 is reflective of both adjustments.

 
 
For the Nine Months Ended September 30, 2007 
For the Period From February 23, 2006 (Inception) to September 30, 2006 As Originally ReportedRestatedAs Originally ReportedRestatedRevenues$      - $           -  $      - $      - Cost      and expenses:Research      and development801,609 727,920 55,371 419,816 Write-down      of a sublicense -   -  676,854 676,854 General      and administrative expense337,449 341,119 85,138 75,555 Change      in redemption amount of redeemable shares-- 31,239 31,239 1,139,058 1,069,039 848,602 1,203,464 Operating      loss(1,139,058)(1,069,039)(848,602)(1,203,464)Canadian      research      and development investment tax credit(81,808)(81,808)(35,990)(35,990)Minority      interest(256,146)256,146)(310,905)(310,905)Net loss$(801,104)$(731,085)$(497,838)$(856,569)Net loss per share - basic and diluted$(68.95)$(62.93)$(50.17)$(85.66)Weighted average number of shares      outstanding - basic and diluted11,618 11,618 10,000 10,000 
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For the Period From February 23, 2006 (Inception) to September 30, 2007  As Originally ReportedRestatedRevenues$      - $      -  Cost      and expenses:Research      and development1,055,101 1,311,173 Write-down      of a sublicense 676,854  676,854 General      and administrative expense509,693 509,693 Change      in redemption amount of redeemable shares31,239 31,239 2,272,887 2,528,959 Operating      loss(2,272,887)(2,528,959)Canadian      research      and development investment tax credit(293,714)(293,714)Minority interest(585,906)(585,906)Net loss$(1,393,267)$(1,649,339)
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**Item 2.   Management's Discussion and Analysis or Plan of Operation**.  

 

Statements made in this Interim Report which are not purely historical areforward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of our Company, including, without limitation,(i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

 

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in theforward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which our Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices.

 

Accordingly, results actually achieved may differ materially from expected results in these statements.Forward-looking statements speak only as of the date they are made. Our Company does not undertake, and specifically disclaims, any obligation to update anyforward-looking statements to reflect events or circumstances occurring after the date of such statements.

 

Our Company's plan of operation for the next 12 months is to complete the merger with Lumen, cause Lumen to exercise its option to increase its ownership of PulmoSciencefrom 51% to 61% and concentrate on advancingPulmoScience's PulmoBind technology toward regulatory approval and commercialization.

 

Until the merger with Lumen is consummated, the Company will not engage in any substantive business activity.  The merger with Lumen cannot be consummated until theCompany's registration statement on Form S-4 is declared effective by the Securities and Exchange Commission. We can give no assurance when and if the Securities and Exchange Commission will declare theCompany's S-4 effective, although we hope, by addressing the comments of theCommission's staff, the Commission will declare the S-4 registration statement effective before the end ofFebruary 2008. 

 

       

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**Item 3.   Controls and Procedures.**

 

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President and Treasurer, of the effectiveness of our disclosure controls and procedures.  Based on this evaluation, our President and Treasurer concluded that our disclosure controls and procedures are effectively designed to ensure that information required to be disclosed or filed by us is recorded, processed or summarized, within the time periods specified in the rules and regulations of the Securities and Exchange Commission.  Based on this evaluation, our President and Treasurer concluded that our disclosure controls and procedures are effective in timely alerting him to material information required to be included in our periodic Securities and Exchange Commission reports.  It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. 

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****
 

**PART II- OTHER INFORMATION**

 

**Item 1.   Legal Proceedings.**

          

None; not applicable.

 

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

          

In December 2006, the Company commenced a private placement of its common stock to twenty accredited investors. Each could subscribe for 1,000,000 shares of theCompany's post-Reincorporation Stock Split common stock for $50,000, $0.05 per share, subject to acceptance by theCompany's Board. Nineteen investors remitted the purchase price to the Company by December 31, 2006 and the twentieth in January 2007.  The Company accepted all twenty subscriptions in January 2007 and, pursuant to Rule 419 under the Securities Act of 1933, agreed to place in escrow pursuant to the terms of Rule 419 the proceeds of the private placement and the 20,000,000 shares of common stock subscribed for.  As noted in Note C, these investors have demanded the refund of their purchase price of their investment and have received approximately $900,000 or 90% of their investment back pursuant to Rule 419.

 

The Company relied on Section 4(2) of the Securities Act for an exemption of this private offering and sale from the registration requirements under the Securities Act.

              

**Item 3.   Defaults Upon Senior Securities.**

          

None; not applicable.

 

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

          

None; not applicable.

          

**Item 5.   Other Information.**

          

None; not applicable.

 

**Item 6.   Exhibits and Reports on Form8-K.**

 

 

          Exhibits.

          

               31    Section 302 Certification of Alain U. Vetterli

 

               32    Section 906 Certification of Alain U. Vetterli

 

                               

 

SIGNATURES

 

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

 

         ACORN ACQUISITION CORP.

 

Date:  January30, 2008

                                         By:/s/Alain U. Vetterli

                                           -------------------------

Alain U. Vetterli

 Chief Executive Officer and 

 Chief Financial Officer 

 

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                                                             **Exhibit 31**

                                  CERTIFICATION

 

I, Alain U. Vetterli, certify that:

 

1.

I have reviewed this  amended quarterly report on Form  10-QSB of Acorn Acquisition Corp.;

2.

Based on my   knowledge, this report does not contain any untrue statement of material  fact or omit to state a material fact   necessary to make the statements made, in light of the circumstances under   which such statements were made, not misleading with respect to the  period covered by this report;

 

3.

Based on my knowledge, the   financial statements, and other financial information included in this   report, fairly present in all material respects the financial condition,   results of operations and cash flows of the small business issuer as of, and   for, the periods presented in this report;

 

4.

I am responsible for   establishing and maintaining disclosure controls and procedures (as defined   in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the small business issuer   and have:

 

 

a)

Designed such disclosure   controls and procedures, or caused such disclosure controls and procedures to   be designed under my supervision, to ensure that material information   relating to the small business issuer is made known to me by others within   those entities, particularly during the period in which this report is being   prepared;

 

 

b)

  Evaluated   the effectiveness of the small business issuer's disclosure controls and   procedures and presented in this report my conclusions about the   effectiveness of the disclosure controls and procedures, as of the end of the   period covered by this report based on such evaluation; and

 

 

C)

Disclosed in this report   any change in the small business issuer's internal control over financial   reporting that occurred during the small business issuer's  most recent fiscal  quarter (the small   business issuer's fourth fiscal quarter in the case of an annual report) that   has materially affected, or is reasonably likely to materially affect, the   small business issuer's internal control over financial reporting; and

 

5.

I have disclosed, based on   my most recent evaluation of internal control over financial reporting, to   the small business issuer's auditors and the audit committee of the small   business issuer's board of directors (or persons performing the equivalent   functions):

 

 

a)

All significant   deficiencies and material weaknesses in the design or operation of   internal  control over financial  reporting     which are reasonably likely to adversely affect the small business   issuer's ability to record, process, summarize  and report financial information; and

 

 

b)

Any fraud, whether or not   material, that involves management or other employees who have a significant   role in the small business issuer's internal control over financial   reporting. 

 

 

 

 

Date:  January30, 2008

                                                /S/  ALAIN U. VETTERLI 

                                                ----------------------- 

                                                 Alain U. Vetterli 

                                                Chief Executive Officer and 

                                                Chief Financial Officer  

  

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**Exhibit 32**

 

CERTIFICATION PURSUANT TO

18U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THESARBANES-OXLEY ACT OF 2002

 

In connection with theamended quarterly report of Acorn Acquisition Corp. (the "Company") on Form10-QSB for the period ended September 30, 2007 as filed with the Securities and Exchange Commission (the "Report"), I, Alain U. Vetterli, the Chief Executive Officer and Chief financial Officer of the Company, certify, pursuant to 18U.S.C.§ 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that: 

 

     (1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

     (2)    The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date:  January30, 2008

 

/s/ Alain U. Vetterli

----------------------

Alain U. Vetterli

Chief Executive Officer 

and Chief Financial Officer

 

 

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

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