UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2008

OR

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

For the transition period from ___________to___________

Commission File Number 000-50482

ACRO Inc.
(Exact name of registrant as specified in its charter)






Nevada	98-0377767
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

37 Inbar Street, Caesarea, Israel	30889
Israel	(Zip Code)
(Address of Principal Executive Offices)

+972-4-636-0297
(Registrant’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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:

Yesx Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:






	Large accelerated filero	Accelerated filero
	Non-accelerated filero	Smaller reporting companyx

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

Yeso Nox

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

At August 11, 2008, 67,790,936 shares of the registrant’s common stock were outstanding.

Table of Contents
ACRO INC.
("The Company")
INDEX

PART I. FINANCIAL INFORMATION

	Item 1. Financial Statements	3

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	12

	Item 3. Quantitative and Qualitative Disclosures about Market Risk	16

	Item 4T. Controls and Procedures	17

PART II. OTHER INFORMATION

	Item 1. Legal Proceedings	17

	Item 1A. Risk Factors	17

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17

	Item 3. Defaults Upon Senior Securities	17

	Item 4. Submission of Matters to a Vote of Security Holders	17

	Item 5. Other Information	17

	Item 6. Exhibits	17

	Signatures	17

	Exhibit Index	18

	Certification of CEO Pursuant to Section 302

	Certification of CFO Pursuant to Section 302

	Certification Pursuant to U.S.C. Section 1350

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets

	June 30 2008			December 31 2007
	$			$



Assets

Current assets:
Cash and cash equivalents		66,229			97,159
Short term deposits		180,000			650,000
Restricted cash		30,000			30,000
Trade receivables		10,203			4,626
Prepaid expenses and other current assets		31,492			70,161

Total current assets		317,924			851,946

Other non-current assets		12,902			10,679
Property and equipment, net (Note 3)		82,243			95,194
Intangible assets, net		92,507			98,507


Total assets		505,576			1,056,326


Liabilities and stockholders' equity (deficit)

Current liabilities:
Accounts payable and accrued liabilities		160,111			180,708


Total current liabilities		160,111			180,708


Accrued severance pay		5,443			3,146

Total liabilities		165,554			183,854


Commitments (Notes 5 and 7)

Stockholders' equity:
Common stock; $0.001 par value; 700,000,000 shares authorized;
67,757,604 and 67,543,275 shares issued and outstanding as of
June 30, 2008 and December 31, 2007, respectively		67,758			67,543
Additional paid-in capital		3,562,223			3,534,360
Deficit accumulated during the development stage		(3,289,959	)		(2,729,431	)

Total stockholders' equity		340,022			872,472

Total liabilities and stockholders' equity		505,576			1,056,326

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

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Consolidated Statements of Operations

	Three months ended June 30						Six months ended June 30						Cumulative from Inception (May 22, 2002) to June 30 2008
	2008			2007			2008			2007			Cumulative from Inception (May 22, 2002) to June 30 2008
	$			$			$			$			$


Revenues		15,312			-			17,613			-			32,527

Costs and expenses :

Research and development		50,199			64,709			93,880			113,613			413,297
Sales and marketing		66,527			7,026			114,076			9,082			220,443
General and administrative*		206,846			264,948			352,593			567,403			2,689,446


Total operating expenses		323,572			336,683			560,549			690,098			3,323,186


Operating loss		(308,260	)		(336,683	)		(542,936	)		(690,098	)		(3,290,659	)

Interest and other income (expenses), net		(603	)		(656	)		(1,527	)		(914	)		53,341


Loss before income tax		(308,863	)		(337,339	)		(544,463	)		(691,012	)		(3,237,318	)
Income tax		8,865			5,996			16,065			7,637			52,641


Net loss		(317,728	)		(343,335	)		(560,528	)		(698,649	)		(3,289,959	)


Basic and diluted net loss per common share		(0.00	)		(0.01	)		(0.08	)		(0.01	)		(0.08	)


Weighted average shares used in computing basic
and diluted net loss per common share		67,612,507			67,331,684			67,595,841			66,568,399			46,585,275

Includes $25,743, $83,666; $28,077, $253,664, and $1,028,734 in stock-based compensation to non-employees for the three months ended June 30, 2008 and 2007; for the six months ended June 30, 2008 and 2007, and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008, respectively.

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

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Consolidated Statements of Cash Flows

	Six months ended June 30						Cumulative from inception (May 22, 2002) to June 30 2008
	2008			2007			Cumulative from inception (May 22, 2002) to June 30 2008
	$			$			$



Cash flows from operating activities:
Net loss		(560,528	)		(698,649	)		(3,289,959	)

Adjustments to reconcile net loss to net cash used in
operating activities:
Services contributed by officers		-						3,500
Depreciation and amortization		24,396			21,012			91,528
Stock-based compensation		28,077			253,664			1,028,734

Changes in operating assets and liabilities:
Increase in Trade receivables		(5,577	)					(10,203	)
Decrease in Prepaid expenses and other current assets		38,669			4,916			(31,492	)
Decrease in Accounts payable and accrued liabilities		(20,597	)		2,030			160,111
Increase in Accrued severance pay		2,297			(669	)		5,443


Net cash used in operating activities		(493,263	)		(417,696	)		(2,042,338	)


Cash flows from investing activities:
Decrease (increase) in long term deposit		(2,223	)		840			(12,901	)
Increase in restricted cash		-			(30,000	)		(30,000	)
Decrease (Increase) in short term deposits		470,000			(1,150,000	)		(180,000	)
Purchase of property and equipment		(5,444	)		(13,839	)		(146,278	)
Purchase of intangible assets		-						(120,000	)

Net cash used in investing activities		462,333			(1,192,999	)		(489,179	)


Cash flows from financing activities:
Increase in short term bank-credit		-			(22,777	)		-
Proceeds from issuance of common stock		-			1,500,000			2,836,286
Offering costs		-			(135,000	)		(238,540	)


Net cash provided by financing activities		-			1,342,223			2,597,746

Net (decrease) increase in cash and cash equivalents		(30,930	)		(268,472	)		66,229

Cash and cash equivalents at beginning of period		97,159			341,925			-


Cash and cash equivalents at end of period		66,229			73,453			66,229

Non-cash activities
Acquisition of property and equipment on credit		-			6,000			6,000


Supplemental disclosures of cash flow information:
Cash paid for interest		-			-			-

Cash paid for taxes		-			-			14,433

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

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

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 was originally an oil and gas consulting company in Canada and in the United States. However, during 2006, following a change of control and a private placement financing, the Company ceased to engage in the oil and gas consulting business and engaged in development of products for the detection of military and commercial 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 which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has a limited operating history, has incurred losses of $3,289,959 from operations since its inception. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters include continued development, marketing and licensing of its products as well as seeking additional financing arrangements. Although, management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient revenues from its products or financing on terms acceptable to the Company. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

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

Financial Statement Preparation

The unaudited condensed consolidated financial statements of ACRO Inc. (collectively referred to in this report as the “Company”, “we”, “us”, or “our”), of which these notes are a part, have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation of the financial information as of and for the periods presented have been included.

The results for the interim periods presented are not necessarily indicative of the results that may be expected for any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2007, included in our Annual Report on Form 10-K for the year ended December 31, 2007.

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

Note 2 – Summary of Significant Accounting Policies (cont’d)

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.

The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2007, are applied consistently in these financial statements.

Principles of Consolidation

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

Recently Issued Accounting Standards

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, the purpose of the new standard is to improve financial reporting by providing a consistent framework for determining what accounting principles should be used when preparing U.S. GAAP financial statements. The Board believes that the previous GAAP hierarchy under SAS 69 was flawed.

Under this new Statement, the hierarchy is as follows:

Level A – FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions, AICPA Accounting Research Bulletins and APB Opinions that are not superseded by actions of the FASB, and rules and interpretive releases of the SEC for SEC registrants.

Level B – FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position.

Level C – AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the FASB, consensus positions of the EITF, and Topics discussed in Appendix D of EITF Abstracts.

Level D – Implementation Guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations, AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry.

FAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company expects no material effect on its financial position, result of operations and cash flows as a result of adoption FAS 162.

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

Note 2 – Summary of Significant Accounting Policies (cont’d)

Recently Adopted Accounting Standards

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115 (Statement 159). Statement 159 gives the Company the irrevocable option to carry most financial assets and liabilities at fair value that are not currently required to be measured at fair value. If the fair value option is elected, changes in fair value would be recorded in earnings at each subsequent reporting date. SFAS 159 is effective for the Company’s 2008 fiscal year. The Company expects no material effect on its financial position, result of operations and cash flows as a result of adoption SFAS 159.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurement (Statement 157). Statement 157 defines fair value, establishes a framework for the measurement of fair value, and enhances disclosures about fair value measurements. The Statement does not require any new fair value measures. The Statement is effective for fair value measures already required or permitted by other standards for fiscal years beginning after November 15, 2007. The Company is required to adopt Statement 157 beginning on January 1, 2008. Statement 157 is required to be applied prospectively, except for certain financial instruments. Any transition adjustment will be recognized as an adjustment to opening retained earnings in the year of adoption.

Note 3 – Property and Equipment

Property and equipment consist of the following:

		June 30 2008		December 31 2007
		$		$



Computer equipment	3		13,487		13,487
Production equipment	3		122,809		117,998
Furniture	7-15		7,965		7,330
Leasehold improvements	(*)		2,017		2,017

			146,278		140,832
Less - Accumulated depreciation and amortization			64,035		45,638

			82,243		95,194

(*) over the lease term

Depreciation expense for the three month and six month periods ended June 30, 2008 and 2007, and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008 were $9,276, $18,396, $7,862, $15,012 and $64,035, respectively.

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

Note 4 – Intangible Assets

In March 2006, the Company purchased a patent from Prof. Ehud Keinan (“Prof. Keinan”), a stockholder who holds 30.91% 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 the three month and six month periods ended June 30, 2008 and 2007, and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008, were $3,000, $6000, $3,000, $6,000 and $27,493, respectively.

Note 5 – Stock-Based Compensation

During 2006, the Company engaged three consultants to serve as members of its advisory board. The consultants are entitled to receive shares of common stock each quarter that they serve on the company’s advisory board. One of the consultants resigned during 2007.

During the three and six months periods ended June 30, 2008, 2007 and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008, the consultants were entitled to 33,332 shares (which shares were issued to the consultants after the date of financial statement, on July 16, 2008), 66,664, 199,998, 399,996, and 1,033,927 shares, respectively. During the three and six months periods ended June 30, 2008, 2007 and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008, compensation expense recorded in respect of the shares entitlement by the consultant amounted to $2,000, $4,334, $83,666, $253,664, and $1,004,991, respectively.

Compensation expense was calculated by multiplying the amount of shares entitled by their fair market value on the last day of the service period completed by the consultants.

Under the agreements with the consultants they are entitled to receive up to an additional 144,332 shares of common stock for future services to be performed.

In August 2006, the Company entered into an agreement with a director for his services as a member of the Company’s Board of Directors. As compensation, the director received a signing bonus of $5,000, and a quarterly fee of $1,500 until October 2007, and $3,000 per quarter thereafter. Starting from July 2008, the director agreed that the Company may defer the payment of 50% of his quarterly fee until further notice. In addition, following the adoption of a Stock Option Plan, on April 28, 2008, the Company’s board of directors approved the grant of an option to the director to purchase 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. 143,488 options are fully vested and 17,936 options shall vest at the end of each subsequent quarter, following June 30, 2008, for a period of 4 quarters.

On April 28, 2008, the company’s board of directors approved the grant of options to purchase 1,800,000 shares of common stock of the company to the trustee in trust for the company’s executives, at an exercise price of $0.075 per share. 600,000 of the options shall vest on or after December 31, 2008, and 150,000 of the options shall vest at the end of each subsequent quarter, following December 31, 2008, for a period of 2 years. An additional option to purchase 215,232 shares of common stock of the Company was granted to a director at an exercise price per share that is equal to the par value of the Company’s common stock (as described above).

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

Note 6 – 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 Prof. Keinan (see Note 4), whereby Prof. Keinan has agreed to provide consulting services for duration of three years at a monthly fee of $3,000. Starting from July 2008, Prof. Keinan agreed that the Company may defer the payment of 50% of his monthly fee until further notice. The Company may terminate the Consulting Agreement with 60 days notice. During the three months periods ended June 30, 2008 and 2007, the Company incurred $9,000 and $9,000, respectively, for the consulting services provided by Prof. Keinan. In addition to the Consulting Agreement, the Company purchased a patent from Prof. Keinan in March 2006 (see Note 4).

During the three months periods ended June 30, 2008 and 2007, the Company incurred an expense of $32,238 and $27,356, respectively, for consulting services provided by the Company’s CEO and chairman of the board of directors. Starting from July 2008, the company’s CEO and chairman of the board of directors agreed that the Company may defer the payment of 50% of his monthly fee until further notice.

On April 28, 2008, the Company’s board of directors approved the issuance of 147,665 shares of common stock to two of the Company’s directors. The Company’s board of directors further approved that future payments to Biotech Knowledge LLC, to M.G.-Net Ltd., a company wholly owned by the company’s CEO and chairman of the board and his wife and to Mr. Dan Elnathan, one of our directors, shall be paid based on a minimum exchange rate of$1=4 New Israeli Shekels.

Note 7 – Commitments

The Company entered into non-cancellable operating lease agreements for vehicles and premises. The future minimum lease payments under these leases at June 30, 2008, are as follows:

	Amount
	$



Year ending December 31,
2008		15,774
2009		23,231
2010		6,720

Total minimum lease payments		45,725

Car lease expenses for each of the three months periods ended June 30, 2008 and 2007 and for the cumulative period from May 22, 2002 (date of inception), to June 30, 2008, were $8,349, $5,670 and $39,008, respectively.

ACRO Inc. (A Development Stage Company)
Consolidated Financial Statements

Notes to the Consolidated Financial Statements as of June 30, 2008

Note 7 – Commitments (cont’d)

On October 16, 2007, the Company signed a non-binding letter of intent (“LOI”) to acquire RAY Detection Technology Group (RAY) in an all-stock transaction. RAY develops and provides advanced inspection and detection systems. Completion of the proposed acquisition is subject to a number of conditions, including completion of definitive documentation on terms satisfactory to the parties, due diligence, and the approval of the proposed acquisition by both companies’ boards of directors and raising funds. RAY’s products are based on a proprietary technology, Discovery CERT, enabling trace automated sampling of bulk goods and cargo for the detection of explosive, chemical, and biological threats. On July 23, 2008, the time frame for the preparation and execution of a definitive agreement was extended until November 30, 2008. In connection with the proposed transaction under the LOI, the Company provided to RAY a loan in the amount of $12,000 for the sole use in connection with its EP patent application No. 98930087.6 which was paid directly to RAY’s patent attorney.

On October 28, 2007, the Company’s technology agreement with LSRI – Life Science Research Israel Ltd., a subsidiary of IIBR – Israel Institute for Biological Research, became effective. Under the terms of the agreement, LSRI will license the technology of IIBR’s explosives testing kit (ETK) to the Company, for incorporation into the Company’s pen-like device, allowing the detection of commercial and military explosives. The agreement is subject to minimum annual revenues to be achieved by the Company and royalties to be paid to LSRI. The new device complements the ACRO-P.E.T., the Company’s peroxide explosive tester for the detection of improvised explosives.

Note 8 – Subsequent Event

Additional 33,332 shares which were earned by members of the advisory board during the three months ended June 30, 2008, were issued on July 16, 2008.

On July 8, 2008, the company’s board of directors approved the grant of options to purchase 400,000 shares of common stock of the company to the trustee in trust for two of the company’s executives, at an exercise price of $0.06 per share. 100,000 of the options shall vest on or after September 30, 2008, and 100,000 of the options shall vest at the end of each subsequent month for a period of 3 months.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 of our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission (the “Commission”) on March 13, 2008.

This quarterly report contains forward-looking statements as that term is defined in the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

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

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

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

General

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

Initially, our business had been to provide professional consulting services for the technical and economic evaluation of petroleum and natural gas resources. However, since we were not successful in implementing our initial business plan for consulting services, we decided to no longer offer consulting services to oil and gas companies. Accordingly, on March 15, 2006, we completed our acquisition of a patent for $120,000 pursuant to a patent purchase agreement with Prof. Ehud Keinan, which we refer here as the Patent Purchase Agreement. The patent, U.S. Patent No. 6,767,717, describes a method of detection of peroxide-based explosives. Through a consulting services agreement that we signed at the same time, Prof. 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. We are a development stage company with little history of research and development of explosives detection equipment.

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 Prof. 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 Mr. Aner for a total consideration of $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 $6,000; (iii) 5,999,994 shares of common stock to Mr. Bronfeld for a total consideration of $12,857.13; and (iv) 6,400,002 shares of common stock to BioTech Knowledge LLC, a private company wholly-owned by Prof. 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 30.91% of our common stock.

On October 16, 2007, we signed a non-binding letter of intent (LOI) to acquire RAY Detection Technology Group (RAY) in an all-stock transaction. RAY develops and provides advanced inspection and detection systems for explosive, chemical and biological threats. Completion of the proposed acquisition was subject to a number of conditions, including completion of definitive documentation on terms satisfactory to the parties, due diligence, the approval of the proposed acquisition by both companies’ boards of directors and raising adequate financing. RAY’s products are based on a proprietary technology called Discovery CERT which enables automated trace sampling of bulk goods and cargo for the detection of explosive, chemical and biological threats. On July 23, 2008, we extended the time frame for the preparation and execution of a definitive agreement until November 30, 2008. In connection with the proposed transaction under the LOI, Acro provided Ray a loan in the amount of $12,000 for the sole use in connection with its EP patent application No. 98930087.6 which was paid directly to Ray’s patent attorney.

On October 28, 2007, our technology agreement with LSRI, a subsidiary of IIBR – Israel Institute for Biological Research, became effective. Under the terms of the agreement, LSRI licensed the long-proven technology of IIBR’s explosives testing kit to Acro, for incorporation into our pen-like device. This allows our pen-like device to detect commercial and military explosives. The agreement is subject to minimum annual revenues to be achieved by us and royalties to be paid to LSRI.

As of June 30, 2008, we had not realized any significant revenues from operations and experienced losses of $3,289,959.

Employees

We currently do not have any employees, and our subsidiary Acrosec Ltd. provides us with management services. Our subsidiary hired the services of Gadi Aner, who serves as our Chairman and our Chief Executive Officer, Gabby Klausner, who serves as our Chief Financial Officer (66% time), Shy Markevitch, who serves as our Vice President Business Development, Marketing and Sales and two other employees, one of them is employed on a part time basis.

Cash Requirements

Our cash requirement through June 30, 2009, is approximately $850,000 which we need for implementation of our plan of operation and developing and commercializing our potential explosive detection device. We are obligated to pay BioTech Knowledge LLC, a wholly owned limited liability company of Prof. Ehud Keinan, $3,000 per month for consulting services to be provided by Prof. Keinan. Starting from July 2008, Prof. Keinan agreed that the Company may defer the payment of 50% of his monthly fee until further notice. Prof. Keinan is a stockholder who holds approximately 30.91% of Acro’s outstanding common stock. We estimate our operating expenses and working capital requirements beginning June 30, 2008, and through June 30, 2009, to be as follows:






Estimated Expenses through June 30, 2009

Product Research and Development	$	40,000

Sales and Marketing	$	255,000

General and Administrative	$	526,000

Capital Expenditures	$	11,000

Tax Expenses	$	18,000


Total	$	850,000

At June 30, 2008, we had a working capital of $157,813. In accordance with our current monthly expenses we will need to raise an additional amount of about $700,000 according to our current business structure to satisfy our cash requirement until June 30, 2009. In the 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.

Purchase or Sale of Equipment

During the next 12 months, we plan to spend approximately $11,000 for software, furniture and office equipment.

Our Products

Our first product is 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, high mobility, small size and cost effectiveness. In November 2006, we completed the first production of the ACRO-P.E.T. for evaluation by potential customers. In 2007, we developed a new version of ACRO-P.E.T. which enables easier verification of peroxide-based explosives, such as triacetone triperoxide (TATP). In addition, in the new version we improved the sampling device to enable easy and immediate sampling of suspicious liquids, in addition to all other forms of explosives, such as powder. The new version has been available for sale since mid 2007.

In addition, we have developed another device called ACRO-N.E.T. (Nitride Explosives Tester), which detects the presence of commercial and military explosives. ACRO-N.E.T. incorporates into our pen-like device the explosive testing kit of the Israel Institute for Biological Research (IIBR), licensed to us under an agreement dated October 28, 2007, with a subsidiary of IIBR called Life Science Research Israel Ltd. (LSRI). ACRO-N.E.T. is based on the LSRI explosive detecting kit, called ETK five. The ETK five is capable of identifying the full range of well known types of military and commercially available explosives, and also of homemade explosives based on nitrate and chlorate salts. This new device, ACRO-N.E.T., complements ACRO-P.E.T. by providing the possibility to detect explosives other than TATP. Its operation system and advantages are the same as the ACRO-P.E.T. (it is the same device) but it is using different solutions and detects different explosives.

We see as our main product the “ACRO-SET” that includes both P.E.T. and N.E.T., and covers the total range of explosives detecting. Since the fourth quarter of 2007, we delivered samples of ACRO-SET to several distributors and potential clients in several countries including the USA, UK, China, Canada, Spain, Singapore and Japan. During June and July, 2008, we received a few purchase orders for our products from governmental bodies in the USA and China. However, we have not yet had any significant sales.

To date, evidence of the efficacy of ACRO-P.E.T. is derived from laboratory research and limited product sales. We had performed independent research at the Technion, Israel Institute of Technology, laboratory, which indicated that the ACRO-P.E.T. quickly and accurately detects TATP explosives. ACRO-N.E.T. is based on the LSRI explosive detecting kit, called ETK five. Nevertheless, we cannot assure that ACRO-P.E.T. and ACRO-N.E.T. will gain commercial acceptance in the marketplace. We plan to follow ACRO-P.E.T. and ACRO-N.E.T. with additional products that detect explosives.

Plan of Operation

Our primary objectives over the 12 month period ending on June 30, 2009, are to manufacture and commercialize our product, called the ACRO–SET, that includes both the ACRO-P.E.T. (Peroxide Explosives Tester), and ACRO-N.E.T. (Nitride Explosives Tester), which are detection devices for explosive materials using the intellectual property covered in U.S. Patent No. 6,767,717 and the license agreement with LSRI.

Furthermore, we plan to continue to develop our headquarters as our main research and development base in Israel, and to initiate international marketing and sales to reach a market base worldwide.

Financial Condition, Liquidity and Capital Resources

During the three months ended June 30, 2008, we incurred a loss of $317,728, compared to a net loss of $343,335 for the comparative period in 2007. During the six months ended June 30, 2008, we incurred a loss of $560,528, compared to a net loss of $698,649 for the comparative period in 2007.

During the six months ended June 30, 2008, we incurred $560,549 of operating expenses, comprised of $93,880 for research and development costs, $28,077 for stock-based compensation expenses, $114,076 for sales and marketing costs, $324,516 for general and administrative cost.

During the six months ended June 30, 2007, we incurred $690,098 of operating expenses, comprised of $113,613 for research and development costs, $253,664 for stock-based compensation expenses, $9,082 for sales and marketing costs, $313,739 for general and administrative cost.

At June 30, 2008, we had working capital of $157,813.

At June 30, 2008, our Company had total assets of $505,576, which consisted of cash and equivalents, cash deposits and restricted cash of $276,229, fixed assets of $82,243, intangible assets of $92,507 and prepaid expenses and other current and non-current assets of $54,597.

Until June 30, 2008, we had sales of $35,000. During June 2008, we received a commercial purchase order from a Chinese governmental body in the amount of $18,000, which was delivered in July 2008.

Going Concern

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

We have historically incurred losses, and from inception through June 30, 2008, we have incurred losses of $3,289,959. 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.

The viability of Acro for a significant period of time will be 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 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 comprised 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.

Critical Accounting Policies

Share 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.

Recent Accounting Pronouncements

Under this new Statement, the hierarchy is as follows:

Level B – FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and Statements of Position.

Recently Adopted Accounting Standards

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 $61,499 for the duration of these lease agreements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4T. Controls and Procedures

As of the end of the period covered by this report, being June 30, 2008, 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.

There were no changes in our internal controls over financial reporting identified with the evaluation thereof that occurred during the quarter ended June 30, 2008, that have materially affected, or are reasonable likely to materially affect our internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no material legal proceedings to which we are a party, other than ordinary routine litigation incidental to our business.

Item 1A. Risk Factors

Not applicable.

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

During the period covered by this report, there were no sales of our company’s unregistered securities that have not already been disclosed in a current report on Form 8-K prior to the filing of this report.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed as part of this quarterly report on Form 10-Q and such Exhibit Index is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ACRO INC.
(Registrant)

By: /s/ Gadi Aner
——————————————
Gadi Aner
President, Chief Executive Officer
& Director
Date: August 11, 2008

By: /s/ Gabby Klausner
——————————————
Gabby Klausner
Treasurer and
Chief Financial Officer
Date: August 11, 2008

EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this report.






Exhibit No.	Description

Number	Description	Method of Filing

(3)	Articles of Incorporation and By-laws

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

3.2	Bylaws, dated February 25, 2005.	Incorporated by reference to Exhibit 3.1 to our
		current report on Form 8-K filed March 17, 2005 and
		March 21, 2005

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

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

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

(31)	Section 302 Certification

31.1	Rule 13a-14(a) Certification of Principal Executive Officer	Filed herewith

31.2	Rule 13a-14(a) Certification of Principal Financial	Filed herewith
	Officer.

(32)	Section 906 Certification

32.1	Certification of Principal Executive Officer Pursuant	Filed herewith
	to 18 U.S.C. Section 1350, as Pursuant to Section 906
	of the Sarbanes-Oxley Act of 2002.

32.2	Certification of Principal Financial Officer Pursuant	Filed herewith
	to 18 U.S.C. Section 1350, as Pursuant to Section 906
	of the Sarbanes-Oxley Act of 2002.

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	8th grade Good

TransAtlantic Capital (TACI) Inactive 10-Q2008 Q2 Quarterly report

Content analysis

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

OR

Commission File Number 000-50482

ACRO Inc.
(Exact name of registrant as specified in its charter)

PART I - FINANCIAL INFORMATION

Note 5 – Stock-Based Compensation

Note 7 – Commitments

Item 1. Legal Proceedings

SIGNATURES

EXHIBIT INDEX

TransAtlantic Capital (TACI) Inactive 10-Q2008 Q2 Quarterly report

Content analysis

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

OR

Commission File Number 000-50482

ACRO Inc.(Exact name of registrant as specified in its charter)

PART I - FINANCIAL INFORMATION

Note 5 – Stock-Based Compensation

Note 7 – Commitments

Item 1. Legal Proceedings

SIGNATURES

EXHIBIT INDEX

ACRO Inc.
(Exact name of registrant as specified in its charter)