UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2011

or

[   ] 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: 000-49833

ACRONGENOMICS INC.
(Exact name of registrant as specified in its charter)

Fairfax House, 15 Fulwood Place, London UK WC1V 6AY
(Address of principal executive offices) (Zip Code)

30 697 724 3620
(Registrant’s telephone number, including area code)

Not Applicable
(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.
Yes [   ]    No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)
Yes [   ]    No [   ]  (Not applicable)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date 28,858,481 shares of common stock outstanding as of May 30, 2012.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

It is the opinion of management that the interim financial statements for the three months ended March 31, 2011 includes all adjustments that are necessary in order to make the interim financial statements not misleading.

Our interim financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

ACRONGENOMICS, INC.

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Stated in US Dollars)

ACRONGENOMICS, INC.
(A Development Stage Company)
INTERIM BALANCE SHEETS
March 31, 2011 and December 31, 2010
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the three months ended March 31, 2011 and 2010 and
for the period from August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
for the three months ended March 31, 2011 and 2010 and
for the period from August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

Supplemental Cash Flow Information - Note 11

ACRONGENOMICS, INC.
(A Development Stage Company)
INTERIM STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
INTERIM STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
INTERIM STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
INTERIM STATEMENT OF CHANGES IN CAPITAL DEFICIT
for the period August 17, 1999 (Date of Inception) to March 31, 2011
(Stated in US Dollars)
(unaudited)

ACRONGENOMICS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2011 and 2010
(Stated in US Dollars)
(unaudited)

1

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 2

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 3

As at March 31, 2011, the Company has determined that it does not hold any Level 1 assets and its shareholdings in Molecular Vision, which are measured on a non-recurring basis, represent Level 2 assets.

The fair value changes of the Company’s Level 2 assets are summarized as follows:

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 4

The Company determined for the fair value of the component of derivative liability represented by the warrants issuable on conversion of the promissory notes by using the Black Scholes model with the following assumptions:

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 5

$394,136 Convertible Promissory Note

During the year ended December 31, 2008, the Company was loaned $394,136 by a director of the Company by the issuance of a convertible promissory note, payable on demand, with interest accruing on the balance of principal outstanding at 8% per annum, compounded monthly and payable monthly. The note is convertible into units of the Company at a price of $0.40 per unit. Each unit will consist of one common share and one share purchase warrant exercisable at $0.75 per share for a period of two years from the date of issuance. Upon the issuance of the note, the Company recorded a beneficial conversion feature totalling $292,124 which was accreted to income in its entirety and included in interest, fees and accretion on notes payable in the financial statements during the year ended December 31, 2008.

Effective March 1, 2009, the Company and the lender agreed to modify the terms of the note by increasing the interest rate to 10% per annum and by changing the terms of repayment such that the Company is to repay the note in Canadian dollars at a foreign exchange rate of not less than $1US = $1.27 Canadian. As a result of the Company having to repay the note in a currency other than its functional currency, in accordance with ASC 830-35-1 “Transaction Gains and Losses”, changes in the exchange rate between the US and Canadian dollar will affect the expected amount of the payment upon the settlement of the note requiring the Company to record the change in rate as a transaction gain or loss in the Statement of Operations. For the three months ended March 31, 2011, the Company recorded a foreign exchange loss of $14,261 (2010: $23,642) on the note resulting in a balance payable as at March 31, 2011 of $514,713 (December 31, 2010: $500,452).

During the three months ended March 31, 2011, the Company accrued interest of $11,887 (2010: $10,761) on this note.

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 6

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 7

Research and development expenditures charged by a related company were comprised of testing costs of the molecular diagnostic test products.

Accounts payable and accrued liabilities at March 31, 2011 includes $567,593 (December 31, 2010: $393,917) owing to companies with a common director, a former director and a company of which a former officer and director is the spouse of the Company’s former president for accounting, management and consulting services received.

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 8

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 9

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 10

* Subsequent to March 31, 2011, these warrants expired unexercised

Stock-Based Compensation Plan

In May, 2005, the Company adopted a stock option plan which provides for the granting of stock options to selected directors, officers, employees or consultants in an aggregate amount of up to 2,600,000 common shares of the Company and, in any case, the number of shares to be issued to any one individual pursuant to the exercise of options shall not exceed 10% of the issued and outstanding share capital. The grant of stock options, exercise prices and terms are determined by the Company's Board of Directors.

A summary of changes in the Company’s stock options for the three month period ended March 31, 2011 and the year ended December 31, 2010 is presented below:

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 11

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 12

Stock-based compensation amounts, including those related to shares issued for non-cash consideration during the period, are classified in the Company’s Statement of Operations as follows:

Acrongenomics, Inc.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2011 and 2010
(Unaudited - Stated in US Dollars) - Page 13

Promissory Notes 
         Subsequent to March 31, 2011:

On February 1, 2012, the Company issued a promissory note in the amount of EUR 30,000 bearing interest at a rate of 8% per annum compounded monthly and maturing on July 1, 2012. This note is secured by a guarantee approved by the board of directors of the Company.

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

Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, which 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. Examples of forward-looking statements in this quarterly report include statements regarding, by way of example and not in limitation:

• our plans with respect to Vardisto Investments Limited, Halldale Ventures Limited, and Irwingom Ventures Limited;

• our belief that certain products will be classified in certain categories for regulator purposes; and

• our cash requirements for the next 12 months.

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.

In this report, unless otherwise specified, all references to “common shares” refer to the common shares of our capital stock.

As used in this quarterly report, the terms “we”, “us”, and “our” refer to Acrongenomics, Inc. and its subsidiaries, Vardisto Investments Limited, Halldale Ventures Limited and Irwingom Ventures Limited, unless otherwise indicated. All references to “£” means the Pound Sterling and to $ means United States dollars.

Overview

Previously, we were engaged solely in the business of the development and commercialization of the BioLED Technology, which combines microfluidics and polymer Light Emitting Diodes (“pLED”) for use in future point-of-care diagnostic devices, under various joint development agreement with Molecular Vision Limited (“Molecular Vision”). Molecular Vision owns the BioLED technology and we had the right to develop and commercialize it in exchange for a royalty. On August 19, 2008, we entered into a new agreement with Molecular Vision. Upon the closing of the new agreement with Molecular Vision, our joint development agreement was cancelled in exchange for 25% of the issued and outstanding shares of Molecular Vision. As a result of this new arrangement, we have been much less involved with the development of the BioLED technology than we had been in the past and we have focused instead on acquiring an interest in another technology through obtaining 100% of the issued and outstanding shares of Vardisto Investments Limited (“Vardisto”). In July 2009, we purchased 19,426 preferred shares of Molecular Vision for $275,000 (£166.042) . These preferred shares are convertible into Class B common shares of Molecular Vision at the rate of one Class B common share for each preferred share held. As of March 31, 2011, we held 33,734 shares in the common stock and 19,426 shares in the preferred stock of Molecular Vision, which is approximately 17.2% of the issued and outstanding shares of Molecular Vision. In our December 31, 2010 audited financial statements, we wrote-down our investment in Molecular Vision to a nominal amount. This was mainly due to the minimal cash flow available to continue with the development costs. On December 29, 2010, we completed the acquisition of 100% of the total outstanding share capital of Vardisto Investments Limited. In consideration for the total shares outstanding, we issued a promissory note to Inter Jura CY (Services) Limited, a Cyprus company and the previous sole direct shareholder of Vardisto Investments Limited, for the principal sum of $2,000,000, together with interest thereon at a rate equal to 4% per annum compounded annually, until the balance of principal and interest outstanding is paid in full.

We have the option and right at any time prior to this note being paid to convert any amount outstanding under this Promissory Note (including accrued interest) into shares of our common stock. The conversion will be deemed to occur at the average of the three prior day closing price (the “Average Price”) of our common stock on the OTCBB or any other stock exchange or trading market where our stock is listed for trading. We may deliver a notice of such conversion (the “Conversion Notice”) to Inter Jura CY (Services) Limited at any time before maturity of this note, together with a calculation of the amount converted, the Average Price and the number of common shares to be issued (the “Payment Shares”). Upon issuance and delivery of the Payment Shares to Inter Jura CY (Services) Limited, the amount of this Promissory Note indicated in the Conversion Notice will be deemed satisfied and fully paid.

3

Vardisto’s assets are its ownership interest in Halldale Ventures Limited (“Halldale”) and Irwingom Ventures Limited (“Irwingom”). Halldale and Irwingom are Cyprus private companies, in which Vardisto holds an 80% and 65% interest respectively. This majority ownership interest in the share capital of Halldale and Irwingom gives Vardisto a majority interest in the intellectual property and the business of Halldale and Irwingom.

As a result of the Share Exchange Agreement, (i) Vardisto became a direct wholly-owned subsidiary of our company; (ii) Halldale Ventures Limited became an indirect 80% subsidiary of our company and (iii) Irwingom Ventures Limited became an indirect 65% subsidiary of our company.

Halldale’s assets include research materials and experimental results from the use of a compound referred to as “compound X” as a hypolipidemic agent and development of a potential cholesterol-lowering agent, and main competitor of Statins in combination with essential oil derived from plants to treat effectively hypercholesterolemia. Irwingom’s assets include plans for the development of a system called IKAROS-1000, as a sophisticated and friendly to the environment fire extinguishing system, while its mechanics may also have applications in other sectors.

Cash Requirements

We have not generated any revenues and we have used cash in our operating activities in the amount of $50,129 for the three (3) months ended March 31, 2011 compared to $45,672 for the three (3) months ended March 31, 2010. This negative cash flow is attributable to our net loss of $249,242 offset by the change in accounts payable of $117,914 and non-cash items included in our net loss totaling $79,999 We estimate our cash requirement for the next 12 months to be approximately $300,000, generally falling in four major categories: research and development, general and administrative expenses, investor relations and professional fees.

We estimate our operating expenses and working capital requirements for the next 12 months to be as follows:

Research & Development expenses are expected to include our contributions to the research and development of the potential cholesterol-lowering agent by the subsidiary of Vardisto.

General & Administrative expenses are expected to include travel, transfer agents, office rent, office supplies, banking fees, and corporate materials.

Investor Relations expenses are expected to include the costs of paying for investor relations representatives, press releases, advertising, and interest expense on loans from various investors.

4

Professional fees are expected to include all payments to our outsourced attorney, accountant and independent auditor.

As of March 31, 2011, we had $59,486 in cash compared to $6,615 as at December 31, 2010. We do not have enough funds to pay for our estimated operating expenses for the next 12 months and require additional financing to continue our business.

We anticipate that we will have to address the cash shortfall through additional equity financings in the future. We can offer no assurance, however, that such financings will be available on terms acceptable to our company. If we are able to raise additional financing by issuing equity securities, our existing stockholders’ ownership will be diluted.

If we are not able to sell enough of our shares to meet our financial needs, we will have to consider borrowing the money we need. It is possible that we would not be able to borrow adequate amounts to fund our operations on terms and at rates of interest we find acceptable and in our best interests. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to delay or scale down some or all of our marketing, business development and product development activities or perhaps even cease the operation of our business.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment.

Personnel Plan

We currently do not have any personnel. Our three (3) executive officers share the duties.

General Administration

We anticipate spending approximately $80,000 on general and administration costs in the next 12 months. These costs are expected to consist primarily of travel, office, transfer agents and consulting fees.

Liquidity and Capital Resources

Working Capital (Deficit)

Our working capital (deficit) at March 31, 2011 and December 31, 2010 is summarized as follows:

The increase in our working capital deficit of $139,847 was primarily due to an increase of our accounts payables of $117,914, an increase in the US$ carrying value of our convertible promissory notes payable of $72,689, an increase of loans payable of $2,115 and an increase in our cash of $52,871.

On February 14, 2011, subsequent to our December 31, 2010 year end, we entered into a debt agreement with Asher Enterprises, Inc. in exchange for $53,000 in cash financing maturing on November 16, 2011. The convertible note accrues interest at a rate of 8% per annum to maturity and 22% thereafter. The note is convertible at 61% of the average of the lowest three closing prices of the common shares of the ten trading days prior to the conversion date.

On April 18, 2011, we received a demand letter with respect to a convertible promissory note dated February 14, 2011 issued to Asher Enterprises, Inc. in the principal amount of $53,000 bearing a per annum interest rate of 8%. The letter stated that the convertible promissory note provides that we would be in default if we fail to comply with the reporting requirements of the Securities Exchange Act of 1934. Based on this, the letter stated that we were in default under the convertible promissory note and demanded the immediate payment as provided in the convertible promissory note of $79,500 together with default interest as provided in the convertible promissory note. The letter stated that Asher Enterprises, Inc. would consider waiving this default, provided that we immediately become current in our filing obligations. Asher Enterprises, Inc. agreed to postpone the demand for payment, as long as we provided them with regular updates on our status of our reporting requirements.

5

We are still in default, but working to resolve the matter. Cash Flows

Our cash flow for the three (3) month period ended March 31, 2011 and 2010 is summarized as follows:

Cash Used In Operating Activities

During the three months ended March 31, 2011 we used net cash in operating activities in the amount of $50,129 as a result of our net loss totaling $249,242 offset by the change in accounts payable of $117,914 and non-cash items included in our net loss totaling $79,999

Cash from Financing Activities

During the three months ended March 31, 2011, cash provided by financing activities was $103,000 consisting of a share subscription in the amount of $50,000 and the issuance of a promissory note in the amount of $53,000.

Cash from Investing Activities

We did not use any cash in investing activities during the three months ended March 31, 2011.

Results of Operations

Revenue

We have not earned any revenues since our inception and we do not anticipate earning revenues until such time as we have begun commercial production or royalties from our investment in our subsidiaries.

Expenses

Our expenses for the three (3) months ended March 31, 2011 and 2010 were as follows:

6

Expenses for the three (3) months ended March 31, 2011 decreased by a total of $738 compared to the three (3) months ended March 31, 2010. The decrease was due to a decrease in our bank service charges in the amount of $131, a decrease in our office and miscellaneous expenses in the amount of $665, a decrease in the rent expense of $15,288, and a decrease in the fair value of our derivative liability in the amount of $85,163. This decrease was in return offset by an increase in our accounting and auditing fees in the amount of $2,447, an increase in our consulting fees of $15,587, an increase in our legal fees of $8,611, an increase in the amount paid to our transfer agent and filing of $4,016, an increase in our interest, fees and accretion on our notes payable in the amount of $66,431 and an increase in foreign exchange loss of $2,217.

Audit Fees and accounting fees

Our accounting and audit fees increased by $2,447 in the period ended March 31, 2011 compared to the period ended March 31, 2010 due to an decrease in audit fees of $7,025 resulting from auditors only commencing work on the year end audit after the quarter ended March 31, 2011 and an increase in accounting fees of $9,472 due to the company completing the accounting work on the December 31, 2010 during the quarter ended March 31, 2011.

Office and Bank Charges

Our combined office and bank charges decreased during the period ended March 31, 2011 by $796 compared to the period ended March 31, 2010. This was mainly the result of us undertaking less activities.

Consulting Fees

The consulting fees we paid increased during the period ended March 31, 2011 by $15,587compared to the period ended March 31, 2010. This was the result of our Company requesting and paying a consultant for additional work in 2011 in the amount of $ 12,625 and an increase in stock-based compensation in 2011 of $ 2,962.

Legal Fees

Our legal fees increased in the period ended March 31, 2011 by $8,611 compared to the period ended March 31, 2010. This was the result of our company requiring legal services in the amount of $5,611 during the quarter on our investment in Molecular Vision and Vardisto investments. In addition we incurred a $3,000 legal fee on the convertible note with Asher Enterprises.

7

Rent Expenses

Our rental expenses decreased in the period ended March 31, 2011 compared to the period ended March 31, 2010 by $15,288. This was the result of our Company not having to pay $15,000 of rent to Vardisto during the quarter ended March 31, 2011 due to our acquisition of Vardisto in December 2010. In addition the company had to pay the balance outstanding of $288 on fees for our registered office in London.

Transfer Agent and Filings

Our transfer agent and filings expense increased for the period ended March 31, 2011 by $4,016 compared to the period ended March 31, 2010. This was due to the number of forms that required to be filed with our transfer agent regarding the convertible note with Asher Enterprises.

Interest, fees and accretion on Notes Payable

The interest we incurred on notes payable increased by $66,431 in the period ended March 31, 2011 compared to the period ended March 31, 2010. This was the result of additional interest on unpaid accrued interest and accretion on the debt discount associated with the Vardisto promissory note in the amount of $41,934.

Change in fair value of the derivative liability

This amount decreased by $85,163 for the period ended March 31, 2011 because the calculation of the fair value of the embedded derivative liability on two (2) of our convertible promissory notes was $Nil for the period ended March 31, 2011, however, for the period ended March 31, 2010 the fair value was calculated as $85,163.

Going Concern

We have historically incurred losses and have incurred a loss of $249,242 for the three months ended March 31, 2011 and a loss of $249,980 for the three months ended March 31, 2010. Because of these historical losses, we will require additional working capital to develop our business operations. We intend to raise additional working capital through private placements, public offerings, bank financing and/or advances from related parties or shareholder loans.

The continuation of our business is dependent upon obtaining further financing and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current or future stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (i) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (ii) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. 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 cease operations.

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

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risks.

Not Applicable.

8

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of March 31, 2011.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, these officers concluded that as of March 31, 2011, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures were due to material weaknesses described below.

We continue to have material weaknesses in our internal control over financial reporting as disclosed in our annual report on Form 10-K filed on March 12, 2012. More specifically, management has identified material weaknesses in our internal control over financial reporting primarily in the following areas:

• Our company’s accounting staff does not have sufficient technical accounting knowledge relating to accounting for income taxes and complex US GAAP matters. Management corrected any errors prior to the release of our company’s March 31, 2011 financial statements.

Because of the inherent limitations in our technical accounting knowledge of US GAAP, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Assuming we have sufficient funds, we intend to engage the services of an independent consultant with sufficient expertise in complex US GAAP matters to assist us in the preparation of our financial statements by December 31, 2012.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On February 14, 2011, we entered into a debt agreement with Asher Enterprises, Inc. in exchange for $53,000 in cash financing maturing on November 16, 2011. The convertible note accrues interest at a rate of 8% per annum to maturity and 22% thereafter. The note is convertible at 61% of the closing price of the common shares on the day prior to the conversion date.

On April 18, 2011, we received a demand letter with respect to a convertible promissory note dated February 14, 2011 issued to Asher Enterprises, Inc. in the principal amount of $53,000 bearing a per annum interest rate of 8%. The letter stated that the convertible promissory note provides that we would be in default if we fail to comply with the reporting requirements of the Securities Exchange Act of 1934. Based on this, the letter stated that we were in default under the convertible promissory note and demanded the immediate payment as provided in the convertible promissory note of $79,500 together with default interest as provided in the convertible promissory note. The letter stated that Asher Enterprises, Inc. would consider waiving this default, provided that we immediately become current in our filing obligations. Asher Enterprises, Inc. agreed to postpone the demand for payment, as long as we provided them the periodic status of our reporting requirements. We remain in contact with legal counsel for Asher Enterprises, Inc. Acrongenomics is in the process of raising funds to pay the total note to Asher Enterprises, including all interest and penalties owed to the company.

9

Item 1A. Risk Factors.

Much of the information included in this report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.

Shares of our common stock are speculative, especially since we are in the development stage of our new business. We operate in a volatile sector of business that involves numerous risks and uncertainties. The risks and uncertainties described below are not the only ones we face. Other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose all or part of your investment. Prospective investors should consider carefully the risk factors set out below.

Risks Related to our Financial Condition

We have not earned any revenues since our incorporation and only have a limited operating history in our current business, which raise doubt about our ability to continue as a going concern.

Our company has a limited operating history in our current business and is in the development stage. We have not generated any revenues since our inception and we will, in all likelihood, continue to incur operating expenses without significant revenues until we successfully develop a compound referred to as “compound X” as a hypolipidemic agent and a potential cholesterol-lowering agent or develop a system called IKAROS-1000 as a sophisticated and friendly to the environment fire extinguishing system. Our primary source of funds has been the sale of our common stock. We cannot assure that we will be able to generate any significant revenues or income. These circumstances make us dependent on additional financial support until profitability is achieved.

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Since our inception, we have accumulated a deficit of $30,776,107 as at March 31, 2011 (December 31, 2010 - $30,528,065) and incurred a net loss during the three month period ended March 31, 2011 of $249,242 (March 31, 2010 - $249,980). These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditor’s report on our consolidated financial statements for the year ended December 31, 2010, which are included in our annual report on Form 10-K filed with the SEC on March 12, 2012. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they do not include any adjustments relating to recoverability and classification of recorded assets, or the amounts or classifications of liabilities that might be necessary in the event our company cannot continue in existence.

We need to raise additional financing to support the research and development of future business but we cannot be sure that we will be able to obtain additional financing on terms favorable to us when needed. If we are unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.

Our ability to develop our business is dependent upon our ability to raise significant additional financing when needed. Our future capital requirements will depend upon many factors, including:

• investments in Vardisto;

• investments in other technologies or technology companies.

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We have limited financial resources and to date, very limited cash flow from operations and we are dependent for funds on our ability to sell our common stock, primarily on a private placement basis. There can be no assurance that we will be able to obtain financing on that basis in light of factors such as the market demand for our securities, the state of financial markets generally and other relevant factors. Any sale of our common stock in the future will result in dilution to existing stockholders. Furthermore, there is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardizing our business viability. Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct the development of our technology, which might result in the loss of some or all of your investment in our common stock.

Risks Related to our Business

Substantial Research on our projects is still needed without any results guaranteed

Our projects involve substantial research with unpredictable results. There is a high risk that such further research produces results that make our projects unrealistic or too difficult to complete and that may impair our ability to conduct business operations as currently planned.

Loss of the inventors could impair our ability to further develop the projects.

We expect Dr. Margarita Hantzopoulou-Cladaras, the inventor for the “compound X”, and Mr. Emmanuel Aslanis, the inventor for the IKAROS-1000 system, to continue working on their respective projects. If we lose Dr. Hantzopoulou-Cladaras and/or Mr. Emmanuel Aslanis, our business could suffer. Our success is highly dependent on our ability to attract and retain qualified personnel. If we were to lose our inventors, we may experience difficulties in competing effectively, developing our technology and implementing our business strategies. We do not have key man life insurance in place for any of our key personnel.

Our ability to hire and retain qualified personnel will be an important factor in the success of our business and a failure to hire and retain key personnel may result in our inability to manage and implement our business plan. Our ability to hire and retain qualified personnel will be an important factor in the success of our business. In addition, in order to manage growth effectively, we must implement management systems and continue to recruit and train new employees. We may not be able to attract and retain the necessary qualified personnel. If we are unable to retain or to hire qualified personnel as required, we may not be able to adequately manage and implement our business plan.

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

Most of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for you to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any U.S. state.

Our disclosure controls and procedures and internal control over financial reporting were proven not effective, which may cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management evaluated our disclosure controls and procedures as of March 31, 2011 and concluded that as of that date, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to a lack of knowledge regarding U.S. generally accepted accounting principles and the rules of the Securities and Exchange Commission by responsible people within our company.

We have not yet remediated these disclosure weaknesses and we believe that our disclosure controls and procedures continue to be ineffective. Until these issues are corrected, our ability to report quarterly and annual financial results or other information required to be disclosed on a timely and accurate basis may be adversely affected and our financial reporting may continue to be unreliable, which could result in additional misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

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Risks Related to our Common Shares

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

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

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because a portion of our continued operations will be financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 100,000,000 shares of common stock with a par value of $0.001. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock may be restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

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

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Pink. Trading of our stock through the OTC Pink is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

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

During the month of February 2012, we received $15,000 pursuant to the sale of 150,000 shares at $0.10 per share from one non-U.S. person (as the term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S. During the same month, we received $9,000 pursuant from the sale of 90,000 shares at $0.10 from two (2) U.S. persons relying on Section 4(2) and/or Rule 506 of the Securities Act of 1933. None of the above shares have been issued yet. No warrants are attached to these above shares.

On February 15, 2011, we issued 75,000 units having a fair value of $12,625 to a consultant for consulting services rendered. Each unit consists of one share of common stock and one common share purchase warrant exercisable at $0.50 per share for a period of two years. We issued these units to an offshore subscriber pursuant to Regulation S of the Securities Act of 1933.

During the month of March 2012, we received $45,026 pursuant to the sale of 450,260 shares at $0.10 per share from four (4) non-U.S. persons (as the term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S. During the same month, we received $10,000 pursuant from the sale of 100,000 shares at $0.10 from one (1) U.S. person relying on Section 4(2) and/or Rule 506 of the Securities Act of 1933. None of the above shares have been issued yet and no warrants are attached.

During the month of April 2012, we received $83,000 pursuant to the sale of 830,000 shares at $0.10 per share from four (4) non-U.S. persons (as the term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S. None of the above shares have been issued yet and no warrants are attached to these shares.

During the month of May 2012, we received $8,500 pursuant to the sale of 85,000 shares at $0.10 per share from two (2) non-U.S. persons (as the term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S. None of the above shares have been issued yet and no warrants are attached to these shares.

Item 3. Defaults Upon Senior Securities.

Please see Item 1. Legal Proceedings of Part II – Other Information of this quarterly report on Form 10-Q.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

On February 1, 2012, we issued a promissory note in the amount of EUR 30,000 bearing interest at a rate of 8% per annum compounded monthly and maturing on July 1, 2012. This note is secured by a guarantee approved by our board of directors.

On March 25, 2011, we signed a convertible promissory note with Jacques Nauer in the amount $50,000. The note is to be settled with shares of our company at $0.08 per share.

Item 6. Exhibits.

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* Filed herewith.

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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.

ACRONGENOMICS INC.

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