FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

      [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT
            OF 1934

                    For the fiscal year ended July 31, 2005.

      |_|   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
            EXCHANGE ACT OF 1934

              For the transition period from ________ to ________.

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

                                Bert Logic, Inc.
                           (Former Name of Registrant)
                                    0-32801

          Washington                0-32801                91-2034750
(State or other jurisdiction of    (Commission          (I.R.S. employer
incorporation or organization)      File No.)          identification no.)


                Amos Eiran, Chairman of the Board and Acting CEO
                              Herzlia Business Park
                             8 Maskit St., 4th floor
                                     Herzlia
                                  46733 Israel
                                 +972-9-9561151
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                          principal executive offices)

         Securities registered under Section 12(b) of the Exchange Act:


Title of Each Class                  Name of each Exchange on Which Registered
Common Stock ($0.0001 Par Value)                         None
Preferred Stock ($0.0001 Par Value)                      None


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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 |X|
No |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB |X|.

The issuer's had no total revenues for the year ended July 31, 2005.

At July 31, 2005, the number of shares outstanding of the registrant's Common
Stock, $0.0001 par value (the only class of voting stock), was 27,582,114.


                                       1
<PAGE>

                                TABLE OF CONTENTS

                                     PART I

Item 1.  Description of Business............................................   3

Item 2.  Description of Property............................................   6

Item 3.  Legal Proceedings..................................................   6

Item 4.  Submission Of Matters To A Vote Of Security Holders................   8


                                    PART II

Item 5.  Market For Common Equity And Related Stockholder Matters...........   9

Item 6.  Management's Discussion And Analysis Of Financial Condition,
Changes In Financial Condition And Results Of Operations....................   9

Item 7.  Financial Statements...............................................  12

Item 8.  Changes And Disagreements With Accountants On Accounting
And Financial Disclosure....................................................  13

Item 8A. Controls and Procedures............................................  13

Item 8B. Other Information..................................................  13
                                    PART III

Item 9.  Directors, Executive Officers, Promoters And Control Persons;
Compliance With Section 16(A) Of The Exchange Act...........................  14

Item 10. Executive  Compensation ...........................................  15

Item 11. Security Ownership Of Certain Beneficial Owners And Management.....  16

Item 12. Certain  Relationships  And  Related  Transactions.................  17

Item 13. Exhibits...........................................................  19

Item 14. Principal Accountant Fees and Services.............................  19


                 [This Space Has Been Intentionally Left Blank]


                                       2
<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

History

Tissera, Inc. (the "Company") was incorporated under the laws of the State of
Washington on May 31, 2000 as Bert Logic, Inc. Our Internet address is
www.tissera.com.

On September 4, 2003, the former president of Bert Logic Inc. completed a share
purchase agreement with the Company's existing shareholders, who purchased
15,000,000 shares of the then issued and outstanding 18,036,000 of the Company's
Common shares. In connection with the consummation of the transaction, the
president of the Company resigned as president and sole director of the Company.
Pursuant to the agreement, the Company entered into an amended license agreement
to sell Bit Error Rate Testers on a worldwide non-exclusive basis. In exchange,
the Company obtained forgiveness of the remaining promissory note of $10,299,
and accrued interest of $2,436. Also, in connection with the transaction, the
former president of the Company agreed to forgive his shareholders' loan, in the
amount of $2,442.

Following the share purchase agreement dated September 4, 2003, the management
of the Company has decided to discontinue all activities related to the sales of
Bit Error Rate Testers, used for the integrity and reliability of communication
channels. The discontinuation of their activity was accounted for under the
provision of SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets".

On October 8, 2003, the Company entered into a research and license agreement
(the "Research Agreement") with Yeda Research and Development Company Limited
("Yeda"), described in greater detail below.

On October 9, 2003, the Company's Board of Directors resolved to change the name
of the Company from Bert Logic, Inc. to "Tissera, Inc."

On October 27, 2003 the Company incorporated a wholly-owned subsidiary in
Israel, Tissera Ltd.

General

We develop, test and intend to commercialize solid organ transplantation
therapies based on an approach employing organ-specific precursor tissues. Our
future approach involves harvesting embryonic mammalian tissue at the most
appropriate stages after stem cells have committed to becoming organ-specific
precursor tissues and transplanting them in target human organ systems. The
optimal windows for embryonic tissue transplantation have been defined by Prof.
Reisner's lab at the Weizman Institute. We entered into a Research and License
Agreement with Yeda, whereby Yeda procures the performance of research at the
Weizman Institute of Science, under the supervision of Professor Yair Reisner of
the Department of Immunology. Pursuant to the Company's agreement with Yeda,
Yeda provided the Company with a worldwide, exclusive license to develop,
manufacture and sell products for solid organ transplantation from embryonic
tissue based on research conducted under the supervision of Professor Reisner of
the Department of Immunology of the Weizmann Institute of Science. The license
shall expire in each country with respect to each product at the later of (i)
the expiration of the patents covering such product in the country of sale, or
(ii) 15 years from the date of receipt of FDA New Drug Approval in the United
States for such product, or the equivalent in any other country in which the
products are sold.

For the year ended July 31, 2005, we did not generate revenues and generated net
losses of $3,983,000 as compared to no revenue and net losses in the amount of
$22,529,000 for the year ended July 31, 2004.

We are at development stage and devoting substantially all of our efforts toward
conducting R&D activities, raising capital, pursuing regulatory approval,
recruiting personnel and building infrastructure. Our former line of business
was selling bit error testers. Our license in connection with bit error testers
expired in May 2004.

Organ Transplantation

General

Yeda is the commercial arm of the Weizmann Institute of Science. The Yeda
Research Agreement provides the Company with the license to market and sell
products for solid organ transplantation from embryonic tissue based on research
conducted at the Weizmann Institute of Science under the supervision of Prof.
Reisner in accordance with the Research Agreement. The Company intends to market
and sell products for solid organ transplantation from embryonic tissue based on
research conducted by Prof. Reisner's lab at the Weizmann Institute of Science.
The Company believes this technology will provide effective alternatives to
current kidney, liver and pancreas transplants and provide therapies for a
number of unmet medical needs in large markets. Yeda has filed several patent
applications with the United States Patent and Trademark Office in accordance
with the Research Agreement.


                                       3
<PAGE>

About the Product

Technologies involving the utilization of stem cells from early human embryos or
adults are being researched and developed as a source of early stage cells that
could be isolated, grown in culture and used to replace tissues impaired by many
devastating diseases. In 1998, scientists first developed a procedure whereby
they were able to isolate embryonic stem cells from early human embryos and grow
them in culture. Embryonic stem cells were viewed as a new source of tissue that
could be used to replace cells or tissues that are damaged or destroyed by
various diseases. However, scientists have not been able to overcome the
difficulties involved in replicating nature and controlling the growth and
differentiation of stem cells in the laboratory.

Embryonic stem cell research was delayed due to the inability to determine which
organ a cell would develop into. At a certain point in embryonic development,
stem cells differentiate and commit to a particular development pathway leading
to the formation of a specific organ. Unfortunately, it could not be determined
which cells were going to develop into a specific organ. As a result of
embryonic stem cells tendency to develop in a disorganized fashion that could
not be controlled, the scientific community was not able to develop any real
world uses for embryonic stem cells.

Prof. Reisner, through his research at the Weizmann Institute of Science, has
learned to identify kidney, liver, pancreatic and other precursor tissues found
in the developing embryo. Prof Reisner intends to continue to identify
additional organ precursor tissues as well. In their initial experiments, Prof.
Reisner's team harvested kidney precursor tissue from human and porcine embryos
which was then implanted in mice. The approach developed in Prof. Reisner's lab
preserves the natural state of harvested tissue. Tissue is harvested from
aborted embryos and then implanted in the recipient. Tissues are tested for
control purposes; however, cells are not isolated, cultured, expanded or
genetically engineered. This approach takes embryonic tissue and transplants it
in a recipient where it matures into appropriate functional tissue. By using
committed organ-specific precursor cells, uncontrolled differentiation is
avoided. By taking tissue at the earliest time after cells commit to a pathway,
immune response is minimized. Further, cells are not altered through culturing
and manipulation in ways that may reduce their integration in the host.

Implanting healthy embryonic tissue into humans, tissue which will mature and
produce missing proteins, is believed to be a therapy for many diseases where a
specific protein is not being produced in sufficient quantities (i.e. type I
diabetes, hemophilia, etc.). Ideally, human embryonic tissue would be used for
treating diseased human patients. However, in some countries, most notably the
United States, there are objections on ethical grounds to using tissue from
aborted embryos. Furthermore, pigs may be a preferred source of tissue for
certain clinical applications. Pigs can be raised in controlled environments and
typically gestate five to ten embryos in each pregnancy. Embryonic porcine
tissue can be made available as needed. Human tissue produces human proteins
that may have a better therapeutic potential than porcine tissue that produces
somewhat different proteins. In treating some diseases, these differences may be
significant.

The Company intends to market and sell products for solid organ transplantation
from embryonic tissue based on research conducted by Prof Reisner's lab in
accordance with the Research Agreement. The Company believes that the use of
early organ-committed tissues may be appropriate for treating many serious
diseases. The Company believes initial targets should include insulin dependent
diabetes, hemophilia and other liver-related genetic deficiencies, and certain
renal pathologies. The Company, through its commercialization of research
conducted pursuant to the Research Agreement, intends to provide readily
available on demand solutions for patients waiting for transplant organs that
will reduce the need for long term use of immunosuppressive drugs and will
involve minimally invasive surgical procedures that are normally associated with
transplants. The Company understands there are numerous regulatory approvals
which will be needed before the above can be put into place.

Plan of Operation

The Company has licensed the right to develop products for solid organ
transplantation from embryonic tissue from Yeda and entered an agreement to
sponsor research in Prof. Reisner's laboratory at the Weizmann Institute of
Science for three years. Prof. Reisner's team is continuing the development of
applications employing kidney precursor tissue as well as pancreas and liver
precursor tissues. Prof. Reisner plans to begin experiments implanting
pancreatic precursor tissues harvested from pig embryos into pigs and monkeys.
This will allow scientists to monitor the growth of precursor tissues in a large
animal, to develop appropriate surgical techniques, to optimize the amount of
tissue transplanted and to determine the most suitable use of immunosuppressive
drugs. The Company will initially seek approval through pre-clinical development
in Israel and/or Europe.

The License

We develop, test and intend to commercialize solid organ transplantation
therapies based on an approach employing organ-specific precursor tissues. Our
future approach involves harvesting embryonic mammalian tissue at the most
appropriate stages after stem cells have committed to becoming organ-specific
precursor tissues and transplanting them in target human organ systems. The
optimal windows for embryonic tissue transplantation have been defined by Prof.
Reisner's lab at the Weizman Institute.

On October 8, 2003, we entered into a Research and License Agreement (the
"Research Agreement") with Yeda. The agreement relates to the rights of our
company to have the license from Yeda related to research conducted and to be
conducted at the Weizmann Institute of Science, under the supervision of
Professor Reisner of the Department of Immunology, and relates to an invention
comprising methods of organ transplantation utilizing developing nephric and
other tissues. The License granted to us shall expire in each country with
respect to each product at the later of the following:


                                       4
<PAGE>

      o     the expiration of the patents covering such product in the country
            of sale; or

      o     15 years from the date of receipt of FDA New Drug Approval (in the
            United States), or the equivalent in any other country in which the
            products are sold.

In addition, Yeda may terminate the Research and License Agreement if we are in
breach thereof and Yeda may, at its option, terminate the Research and License
Agreement, in whole or in part, or make it non-exclusive if we fail to reach
certain commercialization and development goals as set out in the Research and
License Agreement. Yeda is entitled to unilaterally amend the license so that it
is non-exclusive or terminate the license in the event that we fail to achieve
commercialization of at least one product within certain time limits, fail to
commence various phases of clinical trials within certain time limits or fail to
sell a product after certain milestones. Further, if we contest the validity of
the patents, Yeda may terminate the license. In the event that Yeda would like
to pursue sponsored research with respect to, or the commercialization of, a
given product that would otherwise be subject to the Research and License
Agreement that we have not already commenced developing, then Yeda may provide
us with notice of its intention. Upon receipt of such notice, we will then have
three months to submit a product development program. If we do not submit such
program, the license will be terminated with respect to said given product.

As part of the Research and License Agreement, on February 24,2005, the Company
agreed to issue to Yeda the following:

      o     a warrant, exercisable at an aggregate exercise price of US $900 to
            purchase up to 2.23% of the issued and outstanding shares of common
            stock of our company immediately following the exercise of such
            warrant; and

      o     a warrant, exercisable at an aggregate exercise price of US $1,100
            to purchase up to 2.67% of the issued and outstanding shares of our
            company immediately following the exercise of such warrant.

However, the Research and License Agreement provides that the maximum number of
shares of common stock that Yeda may exercise into for each warrant is 3,010,699
and 3,612,839, respectively (in each case as such number of shares of common
stock shall be appropriately adjusted in the event of stock splits, stock
dividends, capital reorganizations, reclassifications, recapitalizations and the
like as well as issuances or sales by us of shares for par value only, for
consideration less than par value and for no consideration, all in accordance
with the terms and conditions of said warrant, which shall be satisfactory to
Yeda and us). The share amounts described above are adjusted to reflect the
three for one split, but not the other adjustment events described above that
have occurred through the date hereof. Each such warrant shall be exercisable
for a period beginning on the date of its issuance and ending at the later of
the following:

      o     one year following the termination of the Research and License
            Agreement; and

      o     October 7, 2013.

      We also agreed to pay or have paid to Yeda the following:

      o     with regard to the first year of the research period (commencing on
            April 9, 2003), we paid the amount of US $450,000 of which a
            non-refundable installment of US $450,000 was paid on December 23,
            2003. This amount is in addition to the $450,000 paid to Yeda in
            connection with researched performed by Yeda during the first year;

      o     with regard to the second year of research we paid an amount of US
            $900,000 of which $225,000 was paid on April 23, 2004; $225,000 was
            paid on July 8, 2004; $225,000 was paid on October 8, 2004; and
            $225,000 was paid on January 10, 2005; and

      o     with regard to the third year of the research period, we will pay an
            amount of US $900,000 per year, in four equal three monthly
            non-refundable installments, payable in advance at the beginning of
            each three month period during such year, according to a second
            addendum providing for the third year of research which has been
            signed by both parties. With the regard of the third year of
            research an amount of $225,000 was paid on April 18, 2005; $225,000
            was paid on July 11, 2005.

We have also agreed that within one year from the date of the Research and
License Agreement, we will submit a development program to Yeda for its
approval. The company has applied to Yeda for the deferral of the submission of
this program to September 2005, and Yeda has given its consent for the deferral.
The September 2005 product development plan has been submitted to Yeda. We
further undertook to use our best efforts to commercialize the licensed
products. We also agreed to pay Yeda a license fee as follows:

      o     $50,000 per year commencing on April 9, 2006;


                                       5
<PAGE>

      o     4% of net sales of all products covered by the Research and License
            Agreement;

      o     33% of all sublicense fees for all agreements entered into within
            one year of the Agreement; and

      o     16% of all sublicense fees for all agreements entered into after
            such one year period.

Industry

There are numerous companies developing drugs or devices to slow down or halt
the progression of kidney and liver disease, to treat diabetes and to care for
genetic diseases. These companies are developing traditional chemical compounds,
new biological drugs, cloned human proteins and other treatments, which are
likely to impact the markets which the Company is targeting.

There are a number of companies developing cell therapies. Among them, there are
those that are using genetically-engineered, non genetically-engineered cells,
fetal cells, adult cells, progenitor cells, mature cells, human cells and
non-human cells. The Company is aware of two companies that have been involved
in fetal porcine cell transplant. Alexion Pharmaceuticals was developing fetal
porcine cell treatments. Alexion's annual report states that is looking for a
corporate partner and is no longer investing in their cell therapy program.
Diacrin, Inc. was active in developing fetal porcine cell therapies for liver
and cardiac applications. Diacrin had begun phase I studies for a number of
applications. It showed positive phase I results for a Parkinson's disease
therapy but failed to show convincing phase II results. In August 2003, Diacrin
merged with GenVec, Inc. and it is not clear which, if any, of the porcine cell
therapies will be continued.

There are a number of companies using adult stem cells or adult precursor cells.
These companies must first isolate the adult stem cells from surrounding tissue
and then grow them in culture in order to arrive at the number of cells required
for therapeutic use. Growing adult stem cells generally requires the extensive
use of growth factors or genetic engineering techniques. Some of these companies
have had moderate success developing cell therapies (e.g. Genzyme's Carticel for
knee cartilage repair) although they have not yet been able to engineer a
functional organ structure.

Dr. Marc Hammerman at the Washington University in St. Louis has been active in
developing kidney disease therapies based on transplanted embryonic
kidney-precursor cells and has been granted a patent, titled "Chimeric Kidney",
by the US Patent and Trademark Office in connection with this research. A
British company, Intercytex Ltd., has licensed this technology and is sponsoring
research in Dr. Hammerman's laboratory. This same company has also filed a
related PCT application titled "Kidney Formation". In addition, Dr. Hammerman
has been active in developing diabetes mellitus therapies based on transplanted
embryonic endocrine pancreas-precursor tissues and has filed a US patent
application, titled "Chimeric Pancreas", in connection with this research. As it
was felt by us that the above-mentioned patent and patent applications might
have a negative impact on our potential to develop our products, we have
commissioned an expert legal opinion on the matter from a leading office of
patent attorneys. This opinion has been delivered to us, and on its basis, we
now do not believe that either Dr. Hammerman's patent and patent application or
Intercytex' patent application should restrict Tissera's freedom to implement
its pancreatic and/or kidney product development.

We believe, based on information currently available to us, that Dr. Hammerman's
research will not impact our liver, spleen and other organ applications.

Employees

We currently only have three officers and no day to day employees. Mr. Amos
Eiran serves as Chairman of the Board and Acting CEO, Mr. Alex Werber serves as
our Chief Financial officer and Dr. Uri Elmaleh serves as our V.P. of Medical
and Regulatory Affairs. We currently use consultants, attorneys and accountants
as necessary. If we hire employees a portion of any employee compensation likely
would include the right to acquire our stock, which would dilute the ownership
interest of holders of existing shares of our common stock.

ITEM 2. DESCRIPTION OF PROPERTY

We are headquartered at 8 Maskit St. 4th floor, Herzlia Israel where we occupy
1,000 square feet of office space. We believe that this facility is generally
suitable and adequate to accommodate our current operations and that such
facility is adequately insured.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company may become involved in various lawsuits and legal
proceedings which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm the Company's business. Except
for the following, the Company is currently not aware of nor has any knowledge
of any such legal proceedings or claims that we believe will have, individually
or in the aggregate, a material adverse affect on our business, financial
condition or operating results:


                                       6
<PAGE>

      o     On July 19, 2004, an investor who participated in the Company's
            private placement of securities in March 2004, sent a letter to us
            claiming that it was a victim of the Company's misconduct. The
            letter was subsequently withdrawn on July 29, 2004;

      o     On September 30, 2004, an investor who participated in the Company's
            private placement of securities in March 2004, sent a letter to the
            Company asserting the intention to bring a claim against the Company
            in the United States District Court for the Southern District of New
            York in the event that the Company did not reach an appropriate
            compromise The Company entered into a settlement agreement with this
            investor in March 2005 setting forth a final resolution to such
            issues;

      o     On September 7, 2004, certain shareholders demanded that Dr. Vicki
            Rabenou, the former Chief Executive Officer of the Company, repay
            the Company an amount totalling $1,074,000 (which is the value of
            the shares, that the Company issued as a result of Dr. Rabenou's
            cashless exercise of Dr. Rabenou's options, at the date of exercise
            thereof, and which were sold by Dr. Rabenou), claiming that Dr.
            Rabenou's exercise of the options was executed before the end of the
            vesting period. In addition, the above shareholders demanded that
            Dr. Rabenou compensate the Company in the amount of $645,000 for
            damages suffered pursuant to such exercise. The Company denies all
            elements of Dr. Rabenou's assertions regarding the Company's
            responsibility or liability with respect to the matter set forth
            above, and, as a result, no provision regarding the defrayal of such
            matters was recorded in the Company's financial statements; and

      o     On December 21, 2004, Dr. Rabenou, filed civil claim no. 10858/04 in
            the District Labor Court located in Tel Aviv Israel against the
            Company alleging that the Company owed Dr. Rabenou a sum of NIS
            564,140 (approximately $125,000) pursuant to the terms of her
            employment agreement. The Company recorded an expense in its
            operating expenses in the amount of $100,000, in respect of Dr.
            Rabenou's claim. Notwithstanding such recordation, the Company
            intends to vigorously contest Dr. Rabenou's claim. In addition to
            the Company's defense against such claim, the Company, has commenced
            a countersuit against Dr. Rabenou for sums that the Company believes
            to be owed to the Company by Dr. Rabenou for certain actions,
            described below, taken by Dr. Rabenou during the course of her
            tenure as CEO. The Company has, to this end, both filed a motion
            against Dr. Rabenou's claim, with the District Labor Court, and
            filed a counterclaim against Dr. Rabenou in the amount of NIS
            9,405,491 (approximately $2,078,000) in such court. The bulk of the
            Company's claims against Dr. Rabenou concern the actions taken by
            Dr. Rabenou on January 15, 2004, when Dr. Rabenou, in her former
            capacity as our CEO, presented a proposal to the Company's Board of
            Directors to issue a total of 2,677,000 shares in the Company to a
            number of specified entities and individuals set forth in such
            proposal, in consideration for the performance of certain services
            by such entities. The proposed share issuance was approved by the
            Board of Directors based on Dr. Rabenou's recommendation as to its
            propriety. One of the entities to which shares were issued pursuant
            to this meeting was a company named BioGreen Ltd. ("BioGreen"),
            which was issued 397,000 shares (the "BioGreen Shares"). The
            issuance of the BioGreen Shares gave rise to a Company expense in
            the amount of $833,700. After Dr. Rabenou resigned, the Company
            commenced an internal investigation into all corporate actions taken
            during Dr. Rabenou's tenure as CEO. During the course such review,
            Company management determined that it was unable to track and
            properly identity the services that BioGreen had provided to the
            Company. Dr. Rabenou did not cooperate with the Company's efforts to
            identify such services; and the Company believes that its inability
            to determine the scope of BioGreen's services was derived from Dr.
            Rabenou's failure in such respect. In fact, the Company contacted
            Dr. Rabenou several times seeking information and answers concerning
            BioGreen, both directly and through its auditors and lawyers, to no
            avail. Dr. Rabenou refused to answer or to offer any explanations on
            this matter. As a result of the damages that the Company believes
            that it incurred pursuant to such lapse, the Company filed a counter
            claim in the Tel Aviv Labor Court against Dr. Rabenou, seeking
            compensation for damages derived from the BioGreen Share issuance.
            Dr. Rabenou has refused to provide an explanation for her actions.
            In response to the Company's counterclaim, Dr. Rabenou filed a reply
            brief within which she asserted that she assigned her right to the
            BioGreen Shares to an unnamed offshore company incorporated in the
            Bahamas. The Company believes that such unnamed entity is BioGreen.
            None of the defenses or mitigating factors alleged by Dr. Rabenou in
            her reply brief were disclosed by Dr. Rabenou to the Board of
            Directors during the Board of Directors' meeting, held on or around
            January 15, 2004, wherein the Board of Directors authorized the
            BioGreen Share issuance. The Company initially set forth the above
            allegations within its Form 10-QSB filed for the quarter ended April
            30, 2005. Subsequent to the filing of the Form 10-QSB, we were
            contacted by Dr. Rabenou's legal counsel claiming that the Company's
            statements regarding Dr. Rabenou in its Form 10-QSB were libelous
            towards D. Rabenou, threatening legal action if such statements were
            not withdrawn, and, to such end, claiming damages of approximately
            $23,000 related to such alleged libel. The Company vehemently
            disputes the analysis of Dr. Rabenou's legal counsel, believes that
            any claims for compensation in such respect are baseless, and has no
            intention to revoke any of its statements regarding its relationship
            with Dr. Rabenou from its Form 10-QSB. The Company is evaluating and
            intends to continue its evaluation of all legal implications related
            to or derived from its relationship with Dr. Rabenou.


                                       7
<PAGE>

      o     The Company believes that Dr. Rabenou owes the Company an amount
            exceeding NIS300,000 (approximately $66,666) in respect of
            unreturned computer equipment of the Company, unsubstantiated
            expenses, and unauthorized automobile expenses.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the forth quarter ended 2005, the Company did not submit any matters to a
vote of security holders through the solicitation of proxies or otherwise.


                                       8
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

a) Market Information

The Company's common stock is currently traded on the OTC Bulletin Board under
the symbol "TSSR". The Company's common stock was traded on the OTC Bulletin
Board under the symbol "BRTL". The Company's common stock began trading on
August 27, 2002.

The table below sets forth the high and low sales prices for the Company's
common stock for the relevant calendar quarters of 2004 and 2005. The quotations
below reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions:

Year       Quarter       High        Low
----       -------       ----        ---
2004       First         $8.90       $1.44
2004       Second        $3.00       $1.44
2004       Third         $8.90       $1.56
2004       Fourth        $3.44       $0.40
2005       First         $0.48       $0.26
2005       Second        $0.47       $0.28
2005       Third         $0.38       $0.18
2005       Fourth        $0.28       $0.15
2006       First*        $0.26       $0.14

*Up to September 30, 2005

b) Holders

As of October 6, 2005, there were approximately 62 shareholders of record
holding a total of 27,582,114 shares of common stock. The holders of our common
stock are entitled to one vote for each share held of record on all matters
submitted to a vote of shareholders. Holders of the common stock have no
preemptive rights and no right to convert their common stock into any other
securities. There are no redemption or sinking fund provisions applicable to the
common stock.

c) Dividends

There have been no dividends declared since the inception of the Company and
there are no restrictions on the ability to pay dividends on common equity or
that are likely to do so in the future. The payment of dividends is within the
discretion of the Board of Directors and will depend on the Company's earnings,
capital requirements, financial condition, and other relevant factors. There are
no restrictions that currently limit the Company's ability to pay dividends on
its Common Stock other than those generally imposed by applicable state law.

d) Recent Sales of Unregistered Securities

None.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, CHANGES IN
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This annual report on Form 10-KSB contains forward-looking statements, which are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. You should not place undue reliance on
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "intends", "expects",
"plans", "anticipates", "believes", "estimated", "predicts", "potential", or
"continue" or the negative of such terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties, and other factors that may cause the Company'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 such forward-looking statements. These factors include, among
other things, those discussed in this annual report on Form 10-KSB and in the
Company's other filings with the SEC. Although the Company believes that the
expectations reflected in the forward-looking statements are reasonable,
forward-looking statements are inherently uncertain, and the Company cannot
guarantee future results, levels of activity, performance, or achievements. The
Company is under no duty to update any of the forward-looking statements in this
annual report on Form 10-KSB to conform forward-looking statements to actual
results. All forward-looking statements should be considered in light of these
risks and uncertainties.


                                       9
<PAGE>

Overview

We were incorporated under the laws of the State of Washington on May 31, 2000.
We develop, test and intend to commercialize solid organ transplantation
therapies based on an approach employing organ-specific precursor tissues. Our
future approach involves harvesting embryonic mammalian tissue at the earliest
stage at which stem cells commit to becoming organ-specific precursor tissues
and transplanting them in target human organ systems. The optimal window for
embryonic tissue transplantation was defined by Prof. Reisner's lab at the
Weizman Institute. We entered into a Research and License Agreement with Yeda,
whereby Yeda procures the performance of research at the Weizman Institute of
Science, under the supervision of Professor Reisner of the Department of
Immunology. We have a world wide license that shall expire in each country with
respect to each product at the later of (i) the expiration of the patents
covering such product in the country of sale, or (ii) 15 years from the date of
receipt of FDA New Drug Approval in the United States for such product, or the
equivalent in any other country in which the products are sold.

We are at development stage and devoting substantially all of our efforts toward
conducting R&D activities, raising capital, pursuing regulatory approval,
recruiting personnel and building infrastructure. Our former line of business
was selling bit error testers. Our license in connection with bit error testers
expired in May 2004.

Research and License Agreement

On October 8, 2003, we entered into a Research and License Agreement (the
"Research Agreement") with Yeda. The agreement relates to the rights of our
company to have the license from Yeda related to research conducted and to be
conducted at the Weizmann Institute of Science, under the supervision of
Professor Reisner of the Department of Immunology, and relates to an invention
comprising methods of organ transplantation utilizing developing nephric and
other tissues. The License granted to us shall expire in each country with
respect to each product at the later of the following:

      o     the expiration of the patents covering such product in the country
            of sale; or

      o     15 years from the date of receipt of FDA New Drug Approval (in the
            United States), or the equivalent in any other country in which the
            products are sold.

In addition, Yeda may terminate the Research and License Agreement if we are in
breach thereof and Yeda may, at its option, terminate the Research and License
Agreement, in whole or in part, or make it non-exclusive if we fail to reach
certain commercialization and development goals as set out in the Research and
License Agreement. Yeda is entitled to unilaterally amend the license so that it
is non-exclusive or terminate the license in the event that we fail to achieve
commercialization of at least one product within certain time limits, fail to
commence various phases of clinical trials within certain time limits or fail to
sell a product after certain milestones. Further, if we contest the validity of
the patents, Yeda may terminate the license. In the event that Yeda would like
to pursue sponsored research with respect to, or the commercialization of, a
given product that would otherwise be subject to the Research and License
Agreement that we have not already commenced developing, then Yeda may provide
us with notice of its intention. Upon receipt of such notice, we will then have
three months to submit a product development program. If we do not submit such
program, the license will be terminated with respect to said given product. As
part of the Research and License Agreement, on February 24, 2005, the
Company agreed to issue to Yeda the following:

      o     a warrant, exercisable at an aggregate exercise price of US $900 to
            purchase up to 2.23% of the issued and outstanding shares of common
            stock of our company immediately following the exercise of such
            warrant; and

      o     a warrant, exercisable at an aggregate exercise price of US $1,100
            to purchase up to 2.67% of the issued and outstanding shares of our
            company immediately following the exercise of such warrant.

However, the Research and License Agreement provides that the maximum number of
shares of common stock that Yeda may exercise into for each warrant is 3,010,699
and 3,612,839, respectively (in each case as such number of shares of common
stock shall be appropriately adjusted in the event of stock splits, stock
dividends, capital reorganizations, reclassifications, recapitalizations and the
like as well as issuances or sales by us of shares for par value only, for
consideration less than par value and for no consideration, all in accordance
with the terms and conditions of said warrant, which shall be satisfactory to
Yeda and us). The share amounts described above are adjusted to reflect the
three for one split, but not the other adjustment events described above that
have occurred through the date hereof. Each such warrant shall be exercisable
for a period beginning on the date of its issuance and ending at the later of
the following:

      o     one year following the termination of the Research and License
            Agreement; and

      o     October 7, 2013.


                                       10
<PAGE>

We also agreed to pay or have paid to Yeda the following:

      o     with regard to the first year of the research period (commencing on
            April 9, 2003), we paid the amount of US $450,000 of which a
            non-refundable installment of US $450,000 was paid on December 23,
            2003. This amount is in addition to the $450,000 paid to Yeda in
            connection with researched performed by Yeda during the first year;

      o     with regard to the second year of research we paid an amount of US
            $900,000 of which $225,000 was paid on April 23, 2004; $225,000 was
            paid on July 8, 2004; $225,000 was paid on October 8, 2004; and
            $225,000 was paid on January 10, 2005; and

      o     with regard to the third year of the research period, we will pay an
            amount of US $900,000 per year, in four equal three monthly
            non-refundable installments, payable in advance at the beginning of
            each three month period during such year, according to a second
            addendum providing for the third year of research which has been
            signed by both parties. With the regard of the third year of
            research an amount of $225,000 was paid on April 18, 2005; $225,000
            was paid on July 11, 2005.

We have also agreed that within one year from the date of the Research and
License Agreement, we will submit a development program to Yeda for its
approval. The company has applied to Yeda for the deferral of the submission of
this program to September 2005, and Yeda has given its consent for the deferral.
The September 2005 product development plan has been submitted to Yeda. We
further undertook to use our best efforts to commercialize the licensed
products. We also agreed to pay Yeda a license fee as follows:

      o     $50,000 per year commencing on April 9, 2006;

      o     4% of net sales of all products covered by the Research and License
            Agreement;

      o     33% of all sublicense fees for all agreements entered into within
            one year of the Agreement; and

      o     16% of all sublicense fees for all agreements entered into after
            such one year period.

RESULTS OF OPERATIONS - FISCAL YEAR ENDED JULY 31, 2005 COMPARED TO THE FISCAL
YEAR ENDED JULY 31, 2004

REVENUES AND COSTS OF GOODS SOLD

We are in a development stage and, therefore, have no revenues and cost of goods
sold.

OPERATING EXPENSES

Operating expenses from continuing operations for the year ending July 31, 2005
amount to $4,036,000, as compared to $22,521,000 for the year ended July 31,
2004. This decrease is attributed mainly to options and warrants granted to
employees, service providers and consultants totaling $19,925,000 in the year
ended July 31, 2004 as compared to $1,794,000 during the year ended July 31,
2005.

The R&D expenses for the year ended July 31, 2005 amounted to $1,296,000
compared to $13,039,000 during the year ended July 31, 2004. This decrease is
attributed to options and warrants expenses related to Yeda, Professor Reisner
and his fellow scientists Dr. Beni Dekel and Dr. Justen Passwel, the Company
advisory board and the Company employees who created an expense of $14,000 for
the year ended July 31, 2005 compared to an expense of $11,579,000 for the year
ended July 31, 2004.

Our general and administrative expenses decrease to $2,740,000 for the year
ended July 31, 2005 from $9,482,000 for the year ending July 31, 2004. The
decrease in general and administrative expenses is attributed to a decrease in
costs related to warrants and shares granted to service providers and to
employees and directors which was $1,780,000 for the year ended July 31, 2005
and $8,346,000 for year ended July 31, 2004. On March 16, 2005, the Company
entered into a Settlement Agreement in which it amended the terms of the private
offering from March 18, 2004, in which the Company received gross proceeds in
the amount of $5,500,000. The Company recorded an expense of $1,980,000 in
relation with the Settlement Agreement.

FINANCIAL INCOME

We had net financial income in the amount of $68,000 for the year ended July 31,
2005 compared to net financial income of $2,000 for the year ended July 31,
2004. This is primarily a result from interest income on the funds raised on
March 2004 privet placement. The Company has invests its funds in bank deposits
that bear interest rates of approximately 2.0% per annum.

TAXES ON INCOME


                                       11
<PAGE>

Taxes on Income

We had a tax expense amounting to $15,000 resulting from tax liability of our
wholly owned subsidiary Tissera Ltd.

Our company has an agreement with our subsidiary to which it will provide
services related to our Research and Development activities. We will reimburse
Tissera Ltd. for expenses on a cost plus 10% basis which creates a taxable
income in our subsidiary.

(Loss) from discontinued operations of a segment of a business

As a result of the disposal of our activities related to selling a bit error
rate tester, used for the integrity and reliability of communication channels we
had income of $13,000 for the year ended July 31, 2004. Such activity did not
exist in the year ended July 31, 2005.

NET LOSS

As a result of the above, we incurred a net loss of $3,983,000 for the year
ending July 31, 2005, as compared to a net loss of $22,529,000 for the year
ending July 31, 2004.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents were $2,603,000 as of July 31, 2005, compared to
$4,656,000 as of July 31, 2004. The decrease in Cash and Cash equivalents is
attributed to the Company's need to finance its development activities using its
cash and cash equivalents. We had a working capital of $2,203,000 as of July 31,
2005, compared to $4,369,000 as of July 31, 2004. We plan to continue to consume
cash in our research and development activities by payments of salaries,
payments for services received from Yeda and other costs. We also plan to
continue finance our operations through a combination of private placement,
stock issuances, debt issuances, mutual development with possible milestone
license payments and research and development programs. There are no assurances,
however, that we will be successful in obtaining an adequate level of financing
required for the long-term development and commercialization of our planned
products.

ITEM 7. FINANCIAL STATEMENTS

The financial statements are attached hereto following the signature page
beginning on page F-1.


                                       12
<PAGE>

ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

On January 12, 2004, the Company Kost, Forer, Gabbay & Kasierer a member of
Ernst & Young Global ("E&Y") as its principal independent accountant. The
decision to engage E&Y was taken upon the unanimous approval of the Board of
Directors of the Company.

During the two most recent fiscal years and through the date of engagement, the
Company has not consulted with E&Y regarding either:

      o     the application of accounting principles to any specified
            transaction, either completed or proposed, or the type of audit
            opinion that might be rendered on the Company's financial
            statements, and neither a written report was provided to the Company
            nor oral advice was provided that E&Y concluded was an important
            factor considered by the Registrant in reaching a decision as to the
            accounting, auditing or financial reporting issue; or

      o     any matter that was either subject of disagreement or event, as
            defined in Item 304(a)(1)(iv)(A) of Regulation S-B and the related
            instruction to Item 304 of Regulation S-B, or a reportable event, as
            that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-B.

On November 4, 2003, Manning Elliott, Chartered Accountants ("Manning") resigned
as our independent public accountants.

For the years ended July 31, 2003 and up until the date of dismissal, we had no
disagreements with Manning on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Manning, would have caused
it to make reference to the subject matter of the disagreement in connection
with any report or opinion it might have issued.

Manning's opinion in its report on our financial statements for the years ended
July 31, 2003 expressed substantial doubt with respect to our ability to
continue as a going concern. Manning's report on our financial statements for
the years ended July 31, 2003 did not contain any other adverse opinion,
disclaimer of opinion, or modification or qualification of opinion.

ITEM 8A. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation,
under the supervision and with the participation of our chief executive officer
and chief financial officer of our disclosure controls and procedures (as
defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon
this evaluation, our chief executive officer and chief financial officer
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms. There was
no change in our internal controls or in other factors that could affect these
controls during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B. OTHER INFORMATION

None.


                                       13
<PAGE>

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The Company's directors hold office until the annual meeting of shareholders
next held after their election. The officers and directors of the Company as of
December 3, 2004 are as follows:

Name                     Age                 Position
----                     ---                 --------
Amos Eiran               68                  Acting Chief Executive Officer and
                                             Chairman of the Board of Directors

Alex Weber               49                  Chief Financial Officer and Chief
                                             Accounting Officer

Robert G. Pico           60                  Director

Uri  Elmaleh             58                  VP Research

Meir Segev               52                  Director

Peretz Shmuel            64                  Director

Amos Eiran was appointed on September 7, 2004 as the Chairman of the Board and
as the Acting Chief Executive Officer of the Company. Mr. Eiran serves as
Chairman of Atudot, a major Israeli pension fund, and Chairman of the
Investments Committee of Clal Insurance Group, an Israeli insurance company. He
also serves as a director of Deleck Oil Exploration. Mr. Eiran has been a
director for Medis Technologies Ltd. (Nadaq: MDTL) since 1992 and is also a
director of two of its subsidiaries, Medis Inc. and Medis El. Through the summer
of 2002, Mr. Eiran served as the Chairman of the Industrial Cooperation
Authority, the agency in charge of the buy-back and offset programs of the State
of Israel, for seven years. Mr. Eiran was Director General of the Prime
Minister's office during Yitzhak Rabin's first term as Prime Minister. Prior to
and after his term with the Prime Minister's office, he was Director General and
Chairman of Mivtahim, the largest pension fund in Israel. From 1993 to 1995, Mr.
Eiran served as a director for XTL Biopharmaceuticals Ltd., a company presently
traded on the London Stock Exchange. Mr. Eiran received a bachelor's degree in
Liberal Arts from American University in Washington D.C. in 1968, a master's
degree in History from Tel Aviv University in 1974, a diploma in business
administration from Harvard University in 1963 and a diploma in investments from
the Wharton Business School in 2002.

Alex Werber serves as our Chief Financial Officer. From August 2002 to the
present, Mr. Werber has worked as a financial services consultant where he has
provided a wide range of outsourced financial services. In addition, since
September 2000 Mr. Werber has served as the Audit Committee Chairman of the
Board of Directors of Crow Technologies Ltd., a manufacturer of security
products. From October 2001 to August 2002, Mr. Werber was the Chief Financial
Officer of CTMotion Ltd. a developer and deplorer of mobile internet and
location-based services. In addtion, Mr. Werber served as a business developer
for Nokrom Technologies, which specializes in retain financial services,
insurance and telecommunications sectors. From November 1996 to March 2000, Mr.
Werber served as the Vice President of Finance for Vcon Telecommunications, a
developer and manufacturer of video conferencing systems. Mr. Werber is a
Certified Public Accountant and received his Bachelor of Arts in Economics and
Accountancy from Tel Aviv University and did his post graduate study in
Accounting at Tel Aviv University.

Uri Elmaleh holds an M.D. degree from the Hebrew University and Hadassah medical
school in Jerusalem. He is a certified board specialist, who underwent training
in both Internal Medicine and Obstetrics & Gynecology at Hadassah University
Hospital. Prior to joining the company, he served as VP for Business Development
in Rad Biomed Ltd, where he was actively involved in the establishment and
scientific and business mentoring of several Life Sciences start-up companies.

Robert Pico, since joining TranSwith Corporation in 1989, has held several top
management positions at TranSwitch, a publicly traded Nasdaq corporation,
including director of business operations, vice president of sales and vice
president of business development. Mr. Pico is currently the vice president of
business development at TranSwitch Corporation. Mr. Pico sits on the board of
IC4IC , TeraOP, SOSI and is an advisor for Accordion Networks and Optix
Networks. In 1966, Mr. Pico received a BSEE from the University of Hartford, in
1972 he received an MS in Physics from Trinity College and in 1981 he completed
the coursework for an MBA from the University of Hartford.

Meir Segev is a director of our company. Meir Segev was appointed as a director
of Pluristem Inc. on March 18, 2003 and also serves as the Chief Executive
Officer of ISC Holdings Ltd. Mr. Segev graduated from University of Haifa and
received his Bachelor of Arts degree in political science in 1997. From 1997 to
2002, Mr. Segev served as the Headquarters Division Head of Shabak, the Israel
Security Agency. He was primarily responsible for the management and strategic
planning of resources and budget for the entire Headquarters Division of Shabak.

Shmuel Peretz was appointed on November 29, 2004 as a director and as a Chairman
of the Audit Committee of the Board. Mr. Pertez has held several top management
positions Israel Aircraft Industry (IAI) among them the CEO of IAI and President
of IAI Europe. Mr. Petetz served as director on several companies including
Elta, Magal, Elcint and others. Mr. Peretz in 1982, received a MBA degree from
the New York Institution of Technology, in 1963 he received a BA in Economics
from the Hebrew University, Jerusalem.


                                       14
<PAGE>

Code of Ethics

The Company adopted a Code of Ethics for its officers, directors and employees.
A copy of the Code of Ethics is attached hereto as an exhibit.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more then 10 percent of
the Company's Common Stock, to file with the SEC the initial reports of
ownership and reports of changes in ownership of common stock. Officers,
directors and greater than 10 percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

Specific due dates for such reports have been established by the Commission and
the Company is required to disclose any failure to file reports by such dates
during fiscal year 2005. Based solely on its review of the copies of such
reports received by it, or written representations from certain reporting
persons that no Forms 5 were required for such persons, the Company believes
that during the fiscal year ended July 31, 2005, there was no failure to comply
with Section 16(a) filing requirements applicable to its officers, directors and
ten percent stockholders.

ITEM 10. EXECUTIVE COMPENSATION

The following table provides summary information for the years 2003, 2004 and
2005 concerning cash and noncash compensation paid or accrued by the Company to
or on behalf of the president and the only other employee(s) to receive
compensation in excess of $100,000.
<TABLE>
<CAPTION>
                                  SUMMARY COMPENSATION TABLE

                                                                          Long Term Compensation
                                                             -------------------------------------------------
                             Annual Compensation                      Awards                 Payouts
                ----------------------------------------------------------------------------------------------
                                                 Other                    Securities
                                                 Annual      Restricted      Under-
Name and                                         compen-       Stock         lying       LTIP     All Other
Principal                Salary        Bonus     sation        Awards       Options/    Payouts    Compen-
Position        Year       ($)          ($)        ($)          ($)         SARs (#)      ($)     sation ($)
--------------------------------------------------------------------------------------------------------------
<S>             <C>      <C>         <C>         <C>          <C>         <C>           <C>         <C>
Vicki Rabenou   2005     125,000          --             --          --          --          --     158,415
                2004     179,000     110,000(1)          --          --   2,042,551          --     868,492(2)
                2003          --          --             --          --          --          --          --

Amos Eiran      2005     162,000          --             --          --   1,500,000          --      20,156
                2004          --          --             --          --          --          --          --
                2003          --          --             --          --          --          --          --
</TABLE>

(1) On November 4, 2004, the Board of Directors decided to rescind the Bonus
granted to Dr. Rabenou. Dr. Rabenou refused to repay any such amount pursing the
Company request.. This amount is included with in the Company claim against
Dr.Rabenou.

(2) Represents value of the options granted to Dr. Rabenou.

Compensation of Directors

Mr. Pico and Mr. Segev received warrants to purchase 270,540 shares of common
stock each at an exercise price of $1.00.

Mr. Smuel Peretez received warrants to purchase 270,540 shares of common stock
at an exercise price of $ 0.31.

Directors who are not employees of the Company are paid $500 for participation
in Board meeting and $250 for telephonic attendance as well as annual fee of
$8,400.


                                       15
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the stock of the Company as of October 28, 2005, by each
shareholder who is known by the Company to beneficially own more than 5% of the
outstanding common stock, by each director, and by all executive officers and
directors as a group.

                   Name and Address of                  Amount        Percent of
Title of Class     Beneficial Owner                  of Shares(2)      Class(2)
--------------     ----------------                  ------------      --------
Common Stock       Robert G. Pico**                   148,612(3)            *%
                   3 Field Drive
                   Woodbridge, CT 06525

Common Stock       Alex Werber**                       57,549(4)             *%

Common Stock       Amos Eiran**                       854,795(1)             *%

Common Stock       Meir Segev**                       171,157(3)             *%

Common Stock       Peretz Shmuel**                     56,085                *%

Common Stock       Uri Elmaleh**                      133,717                *%

Common Stock       Sharon Laor                      1,620,000             5.87%
                   27 Alexander Penn
                   Tel Aviv, Israel 69641

Common Stock       Yael Zucker                      1,740,000             6.31%
                   27 Alexander Penn
                   Tel Aviv, Israel 69641

Common Stock       All officers and directors       1,421,913             4.90%
                   as a Group

* Less than 1% of the outstanding common stock.

** Executive officer and/or director. Addresses are c/o Tissera, Inc., Herzlia
Business Park, 8 Maskit Street, 4th Floor 46733 Israel.

(1) The Company granted Mr. Eiran warrants to purchase 1,500,000 shares of
common stock at an exercise price of $0.30. Executive's rights to exercise the
warrants shall vest in 24 equal monthly installments during a period of two
years commencing September 7, 2004, of which 854,795 are currently vested.

(2) Unless otherwise indicated, each person has sole investment and voting power
with respect to the shares indicated. For purposes of this table, a person or
group of persons is deemed to have "beneficial ownership" of any shares which
such person has the right to acquire within 60 days as of October 4, 2005. For
purposes of computing the percentage of outstanding shares held by each person
or group of persons named above on December 3, 2004 any security which such
person or group of persons has the right to acquire within 60 days after such
date is deemed to be outstanding for the purpose of computing the percentage
ownership for such person or persons, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person. As of
October 4, 2005, we had 27,582,114 shares of common stock outstanding.

(3) Received a warrant to purchase 270,540 shares of common stock, of which
148,612 are vested for Mr. Pico and 171,157 are vested for Meir Segev.


                                       16
<PAGE>

(4) We granted a warrant to purchase 100,000 shares of common stock to Mr.
Werber. Currently, 57,549 shares of common stock have vested in connection with
the warrant.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No director, executive officer or nominee for election as a director of our
company, and no owner of five percent or more of our outstanding shares or any
member of their immediate family has entered into or proposed any transaction in
which the amount involved exceeds $60,000 except as set forth below.

Other than the $12,000 recorded each year as consulting fees and returned to us
in the form of donated capital and the 5,000,000 shares issued to Mr. Rudelsheim
in exchange for $10,000 upon our inception, there has been nothing of value
(including money, property, contracts, options, or rights of any kind) received
or to be received by Mr. Rudelsheim, directly or indirectly, from our company.
We have not received any other assets, services or other consideration as a
result. We arbitrarily determined the price of the shares issued to Mr.
Rudelsheim.

Mr. Meir Segev and Mr. Robert G. Pico, our directors, each received 270,540
warrants which vest at the rate of 22,545 shares of common stock every three
months during the terms of the warrants. The warrants are exercisable at $1.00
per share..

Mr. Alex Werber, our CFO, was granted 100,000 stock options that are exercisable
at $0.30 per share on a cashless basis. The Stock Options vest and become
exercisable in 36 equal monthly installments of 2,778. The Stock Options expire
(5) years after the date they granted and become exercisable, but in any case
not later than six (6) months after termination of the reporting person's
employment. We have an agreement with Mr. Werber which provides that we must pay
Mr. Werber a monthly salary equivalent to 30,000 NIS ($6,666) pursuant to Mr.
Werber's full time employment with the Company.

We have entered into an employment agreement with Dr. Uri Elmaleh, our Vice
President of Medical and Regulatory Affairs. The agreement provides that we must
pay him 35,000 shekels per months as well as provide him with a car and phone
allowance. We also granted Dr. Elmaleh a warrant to purchase 280,000 shares of
common stock at $.30 per share. On May 25, 2004 the Company granted Dr. Elmaleh
10,090 shares in consideration for services rendered.

In March 2004, the Board of Directors authorized the issuance of 280,000 shares
of common stock to Mr. Pinny Rabenou. Mr. Rabenou is the brother of Dr. Rabenou.
In addition, the Board also authorized the issuance of common stock purchase
warrants to purchase 280,000, which the granting of such warrants were
contingent upon the entering into a definitive employment agreement with Mr.
Rabenou. The issuance was approved by the Board of Directors. However, following
the Company's later investigation, the Company discovered that no consulting
agreement was ever signed between the Company and Mr. Rabenou, and the Company
received what it believes to be only token services from Mr. Rabenou, which, the
Company believes, did not justify the largess of such grant. As no definitive
employment agreement was entered into, the Board of Directors cancelled the
warrants issued to Mr. Rabenou.

We entered into an employment arrangement with Mr. Yaron Sagi. Mr. Sagi, a
shareholder of our company, in exchange for serving in an administrative
capacity, received a warrant to purchase 33,333 shares of common stock at an
exercise price of $.30 per share. Further, Mr. Sagi received a salary of 25,000
new Israeli shekels per month plus use of a company car and cellular phone. This
employment agreement has been terminated.

In consideration for Dr. Rabenou's efforts in obtaining financing for the
Company in the amount of $5,500,000 in March 2004, the Board of Directors
granted a bonus in the amount of $110,000 to Dr. Rabenou. On November 4, 2004,
the Board of Directors decided to cancel a former bonus granted to Dr. Rabenou
in March 2004, in the amount of $110,000 and demand the bonus to be repaid,
based on the Board of Directors' analysis that the grant of such bonus was not
approved by a majority of the Company's shareholders. The Company has submitted
a letter to the former CEO demanding that the bonus be repaid. Dr. Rabenou has
not responded.

At a special meeting of the Board of Directors of the Company, a majority of the
directors of the Company elected to terminate Dr. Rabenou as the Chief Executive
Officer of the Company. In addition, Dr. Rabenou has resigned as a director of
the Company pursuant to a resignation letter from Dr. Rabenou to the Board of
Directors of the Company dated September 20, 2004 (the "Resignation Letter"). In
addition, Dr. Rabenou has resigned as a director and Chief Executive Officer of
Tissera, Ltd., a wholly-owned subsidiary of the Company, pursuant to the
Resignation Letter. Dr. Rabenou's resignation in said capacities was effective
on September 20, 2004.

On November 4, 2004, the Company ratified the issuance of warrants to purchase
200,000 shares of common stock at an exercise price of $1.00 to each Prof
Abraham Shaked, M.D., Ph.D., Sir Roy York Calne, M.D., F.R.C.P., F.R.C.S and
Prof. Shutherland.


                                       17
<PAGE>

The Company granted Mr. Eiran warrants to purchase 1,500,000 shares of common
stock at an exercise price of $0.3. Executive's rights to exercise the warrants
shall vest in 24 equal monthly installments during a period of two years
commencing September 7, 2004. Any vested portion of the warrants, if not
previously exercised shall terminate upon the earlier of three months after
termination of the agreement or 10 years from the date of vesting.

Mr. Smuel Peretez received warrants to purchase 270,540 shares of common stock
at an exercise price of $ 0.31.


                                       18
<PAGE>

ITEM 13. EXHIBITS

Exhibit   Page
No.       No.      Description
---       ---      -----------

3(a)(i)   *        Articles Of Incorporation of Tissera, Inc.
                   (Incorporated by reference filed with the Company's
                   Form SB-2 on November 14, 2000).

3(a)(ii)  *        By-laws of Tissera, Inc.

4         *        Specimen Share of Common Stock

10.1      *        Agreement Between BERT Logic Inc. and Reach
                   Technologies Inc Dated May 31, 2000 for the right to
                   distribute the Reach Technologies Inc. licensed
                   product line.

10.2      **       Agreement Between BERT Logic Inc. And Reach
                   Technologies Inc Dated May 11, 2001 amending the
                   Licensing Agreement with Reach Technologies, Inc.
                   dated May 31, 2000 as it pertains to new territory

10.3      ****     Agreement Between BERT Logic Inc. And Reach
                   Technologies Inc Dated May 31, 2003 amending the
                   Licensing Agreement with Reach Technologies, Inc.
                   dated May 31, 2000

10.4      *****    Agreement Between BERT Logic Inc. And Reach
                   Technologies Inc Dated September 4, 2003 amending the
                   Licensing Agreement with Reach Technologies, Inc.
                   dated May 31, 2000

10.5      ******   Research and License Agreement between Yeda Research
                   and Development Company Limited and Bert Logic Inc.

14.1      ******   Code of Ethics

16.1      ***      Letter on change in certifying accountant.

31.1               Certification of the Acting Chief Executive Officer
                   of Tissera, Inc. pursuant to Section 302 of the
                   Sarbanes-Oxley Act of 2002

31.2               Certification of the Chief Financial Officer of
                   Tissera, Inc. pursuant to Section 302 of the
                   Sarbanes-Oxley Act of 2002

32.1               Certification of the Acting Chief Executive Officer
                   of Tissera, Inc. pursuant to Section 906 of the
                   Sarbanes-Oxley Act of 2002

32.1               Certification of the Chief Financial Officer of
                   Tissera, Inc. pursuant to Section 906 of the
                   Sarbanes-Oxley Act of 2002

* Incorporated by reference filed with the Form SB-2 filed with the Securities
and Exchange Commission on November 14, 2000.

** Incorporated by filed with the Company's Form 10-KSB filed with the
Securities and Exchange Commission on March 15, 2001.

*** Incorporated by reference filed with Company's Form 8-K filed with the
Securities and Exchange Commission on January 13, 2004.

**** Incorporated by reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on June 16, 2003.

***** Incorporated by reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on September 8, 2003.

****** Incorporated by reference to the Company's Form 8-K filed with the
Securities and Exchange Commission on October 14, 2003.

****** Incorporated by reference to the Company's Form 10-KSB filed with the
Securities and Exchange Commission on November 3, 2003.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.


                                       19
<PAGE>

Audit Fees. The aggregate fees billed by our auditors, for professional services
rendered for the audit of the Company's annual financial statements for the two
years ended July 31, 2005 and 2004 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB during
that fiscal year were $92,000, and $79,000, respectively.

Audit Related Fees. The Company did not engage auditors to provide any other
professional services to the Company during the two fiscal years ended July 31,
2005 and 2004.

All Other Fees. There were no fees billed by auditors for services rendered to
the Company, other than the services covered in "Audit Fees" for the fiscal year
ended July 31, 2004.

For the fiscal year ended July 31, 2005. $5,000_ was billed by auditors for
services rendered to the Company, other than the services covered in "Audit
Fees"

The Audit Committee has considered whether the provision of non-audit services
is compatible with maintaining the principal accountant's independence and has
confirmed that no conflict exists.


                                       20
<PAGE>

                                   SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this Amendment to Form 10-KSB to be signed on its behalf by
the undersigned, thereunto duly authorized, this 28th day of October 2005.

                                  TISSERA, INC.

                                  /s/ Amos Eiran
                                  ---------------------------
                                  Name:  Amos Eiran
                                  Title: Chairman of the Board of Directors and
                                         Acting Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                      Title                   Date
---------                      -----                   ----

/s/ Amos Eiran           Acting Chief Executive        October  28, 2005
                         Officer and Chairman of
                         the Board of Directors

/s/ Alex Werber          Chief Financial               October  28, 2005
                         Officer & Chief
                         Accounting Officer

/s/ Robert G. Pico       Director                      October  28, 2005

/s/ Meir Segev           Director                      October  28, 2005

/s/ Peretz Shmuel        Director                      October  28, 2005


                                       21


<PAGE>

                         TISSERA INC. AND ITS SUBSIDIARY
                           (FORMERLY: BERT LOGIC INC.)

                          (A development stage company)

                        CONSOLIDATED FINANCIAL STATEMENTS

                               AS OF JULY 31, 2005

                                 IN U.S. DOLLARS

                                      INDEX


                                                                           Page
                                                                          ------

Report of Independent Registered Public Accounting Firm                     2

Consolidated Balance Sheets                                                 3

Consolidated Statements of Operations                                       4

Statements of Changes in Stockholders' Equity (Deficiency)                  5

Consolidated Statements of Cash Flows                                       6

Notes to Consolidated Financial Statements                                7 - 25

                              - - - - - - - - - - -


                                      F-1
<PAGE>

[ERNST & YOUNG LOGO]

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

                             To the shareholders of

                                  TISSERA INC.
                           (FORMERLY: BERT LOGIC INC.)
                          (A development stage company)

      We have audited the accompanying consolidated balance sheets of Tissera
Inc. (Formerly: Bert Logic Inc.) ("the Company") (a development stage company)
and its subsidiary as of July 31, 2005 and 2004, and the related consolidated
statements of operations, statements of changes in stockholders' equity and the
consolidated statements of cash flows for each of the years then ended and for
the period from May 31, 2000 (inception) through July 31, 2005. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements as of July 31, 2003 and for the period from
May 31, 2000 (inception) through July 31, 2003, were audited by other auditors
whose report dated September 13, 2003 expressed an unqualified opinion on those
statements. The consolidated financial statements for the period from May 31,
2000 (inception) through July 31, 2003 included net loss of $ 105 thousand. Our
opinion on the consolidated statements of operations, changes in stockholders'
equity and cash flows for the period from May 31, 2000 (inception) through July
31, 2005, insofar as it relates to amounts for prior periods through July 31,
2003, is based solely on the report of other auditors.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. We were not engaged to
perform an audit of the Company's internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the report of the other auditors provide a reasonable basis for our
opinion.

      In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above, present fairly, in all
material respects, the consolidated financial position of the Company and its
subsidiary as of July 31, 2005 and 2004, and the consolidated results of their
operations and cash flows for each of the years then ended and for the period
from May 31, 2000 (inception) through July 31, 2005, in conformity with U.S.
generally accepted accounting principles.

      The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As more fully described in Note 1c,
the Company is in the development stage and, as such, has incurred recurring
operating losses, has generated an accumulated deficit and has a negative cash
flow from operating activities. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. The financial statements
do not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainly.

Tel-Aviv, Israel                                  KOST FORER GABBAY & KASIERER
October 28 , 2005                               A Member of Ernst & Young Global


                                      F-2
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

                                                                July 31,
                                                          --------------------
                                                            2005        2004
                                                          --------    --------
    ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                              $  2,603    $  4,656
   Accounts receivable and prepaid expenses (Note 4)           265         237
                                                          --------    --------

Total current assets                                         2,868       4,893
                                                          --------    --------

SEVERANCE PAY FUND                                              29           8
                                                          --------    --------

PROPERTY AND EQUIPMENT, NET (Note 5)                            21          38
                                                          --------    --------

Total assets                                              $  2,918    $  4,939
                                                          ========    ========

    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Trade payables                                         $      5    $     21
   Other accounts payable and accrued expenses (Note 6)        660         503
                                                          --------    --------

Total current liabilities                                      665         524
                                                          --------    --------

ACCRUED SEVERANCE PAY                                           39          12
                                                          --------    --------

COMMITMENTS AND CONTINGENCIES  (Note 7)

Total liabilities                                              704         536
                                                          --------    --------

STOCKHOLDERS' EQUITY:
   Stock capital (Note 9):
   Common stock of $ 0.0001 par value each -
      Authorized: 100,000,000 shares as of
         July 31, 2005 and 2004; Issued and
         outstanding: 27,582,114 and 27,556,914
         shares as of July 31, 2005 and 2004,
         respectively                                            3           3
   Preferred stock of $ 0.0001 par value each -
      Authorized: 20,000,000 shares as of
         July 31, 2005 and 2004; Issued and
         outstanding: 0 shares as of
         July 31, 2005 and 2004                                 --          --
   Additional paid-in capital                               28,859      27,197
   Deferred stock based compensation                           (31)       (163)
   Deficit accumulated during the development stage        (26,617)    (22,634)
                                                          --------    --------

Total stockholders' equity                                   2,214       4,403
                                                          --------    --------

Total liabilities and stockholders' equity                $  2,918    $  4,939
                                                          ========    ========

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


                                      F-3
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

<TABLE>
<CAPTION>
                                                                                                        From
                                                                                                    May 31, 2000
                                                                          Year ended July 31,       (inception
                                                                    ----------------------------    date) through
                                                                        2005            2004            2005
                                                                    ------------    ------------    ------------
<S>                                                                 <C>             <C>             <C>
Operating expenses:
  Research and development (including expenses related to options
     granted to employees and warrants granted to Yeda and to
     service providers in the amount of $ 14 and $ 11,579 for the
     years ended July 31, 2005 and 2004, respectively)              $      1,296    $     13,039    $     14,335
  General and administrative (including expenses related to
     warrants, options and shares granted to service providers,
     employees and directors and compensation to investors in the
     amount of $ 1,780 and $ 8,346 for the years ended July 31,
     2005 and 2004, respectively)                                          2,740           9,482          12,222
                                                                    ------------    ------------    ------------
                                                                           4,036          22,521          26,557

Financial income, net (Note 11)                                               68               2              70
                                                                    ------------    ------------    ------------

Loss from continuing operations before income taxes                        3,968          22,519          26,487
Income taxes (Note 8)                                                         15              23              38
                                                                    ------------    ------------    ------------

Loss from continuing operations                                            3,983          22,542          26,525

Loss (income) from discontinued operations (Note 1a)                          --             (13)             92
                                                                    ------------    ------------    ------------

Net loss                                                            $      3,983    $     22,529    $     26,617
                                                                    ============    ============    ============

Basic and diluted net loss per share                                $      (0.14)   $      (1.04)
                                                                    ============    ============

Weighted average number of shares used in computing basic and
   diluted net loss per share                                         27,580,571      21,787,629
                                                                    ============    ============
</TABLE>

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

                                      F-4
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)

<TABLE>
<CAPTION>
                                                                                                   Deficit
                                                                                                 accumulated       Total
                                            Stock capital           Additional     Deferred       during the    stockholders'
                                     ---------------------------     paid-in      stock based    development       equity
                                        Number         Amount        capital      compensation      stage       (deficiency)
                                     ------------   ------------   ------------   ------------   ------------   ------------
<S>                                  <C>            <C>            <C>            <C>            <C>            <C>
Balance as of May 31, 2000                     --   $         --   $         --   $         --   $         --   $         --

Shares issued for cash on
  May 31, 2000                         15,036,000              2              8             --             --             10
Net loss                                       --             --             --             --             (5)            (5)
                                     ------------   ------------   ------------   ------------   ------------   ------------

Balance as of July 31, 2000            15,036,000              2              8             --             (5)             5

Shares issued for cash on
  July 17, 2001                         3,000,000           *) -             40             --             --             40

Contribution of capital                        --             --             15             --             --             15
Net loss                                       --             --             --             --            (30)           (30)
                                     ------------   ------------   ------------   ------------   ------------   ------------

Balance as of July 31, 2001            18,036,000              2             63             --            (35)            30

Contribution of capital                        --             --             15             --             --             15
Net loss                                       --             --             --             --            (39)           (39)
                                     ------------   ------------   ------------   ------------   ------------   ------------

Balance as of July 31, 2002            18,036,000              2             78             --            (74)             6

Contribution of capital                        --             --             15             --             --             15
Net loss                                       --             --             --             --            (31)           (31)
                                     ------------   ------------   ------------   ------------   ------------   ------------

Balance as of July 31, 2003            18,036,000              2             93             --           (105)           (10)

Stock issued for cash related to
  PPM1, net of $ 176 of cash
  issuance expenses                     1,767,200           *) -          2,033             --             --          2,033
Stock issued for cash related to
  PPM2,net of $ 517 of cash
  issuance expenses                     3,142,858              1          4,983             --             --          4,984
Stock based compensation related
  to warrants granted to service
  providers                                    --             --         11,429             --             --         11,429
Amortization of stock based
  compensation related to options
  granted to employees and
  directors                                    --             --          1,130             --             --          1,130
Compensation related to stock
  granted to service providers and
  to employees                          3,067,090           *) -          7,366             --             --          7,366
Deferred stock based compensation              --             --            163           (163)            --             --
Exercise of options                     1,543,766           *) -             --             --             --           *) -
Net loss                                       --             --             --             --        (22,529)       (22,529)
                                     ------------   ------------   ------------   ------------   ------------   ------------
Balance as of July 31, 2004            27,556,914              3         27,197           (163)       (22,634)         4,403

Deferred stock based compensation              --             --             44            (44)            --             --
Stock based compensation related
  to Warrants granted to investors             --             --          1,980             --             --          1,980
Stock based compensation related
  to Warrants granted to Yeda and
  to service providers                         --             --           (362)            --             --           (362)
Amortization of stock based
  compensation related to options
  granted to employees and
  directors                                    --             --             --            176             --            176
Exercise of options                        25,200           *) -             --             --             --             --
Net loss                                       --             --             --             --         (3,983)        (3,983)
                                     ------------   ------------   ------------   ------------   ------------   ------------

Balance as of July 31, 2005            27,582,114   $          3   $     28,859   $        (31)  $    (26,617)  $      2,214
                                     ============   ============   ============   ============   ============   ============
</TABLE>

*) Represents an amount lower than $ 1.

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


                                      F-5
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. dollars in thousands
<TABLE>
<CAPTION>
                                                                                                                          From
                                                                                                                      May 31, 2000
                                                                                                                       (inception
                                                                                            Year ended July 31,       date) through
                                                                                          -----------------------        July 31,
                                                                                            2005           2004           2005
                                                                                          --------       --------       --------
<S>                                                                                       <C>            <C>            <C>
Cash flows from operating activities:
  Net loss                                                                                $ (3,983)      $(22,529)      $(26,617)
  Adjustments required to reconcile net loss to net cash used in
     operating activities:
  Depreciation                                                                                  14              3             17
  Expenses (income) related to warrants granted to Yeda and to
    service providers                                                                         (362)        11,429         11,067
  Expenses related to options granted to employees and directors                               176          1,130          1,306
  Expenses related to stock granted to service providers and to
    employees                                                                                   --          7,366          9,346
  Expenses related to Warrants granted to investors                                          1,980             --          1,980
  Increase in accounts receivable and prepaid expenses                                         (28)          (237)          (265)
  Increase (decrease) in trade payables                                                        (16)            21              5
  Increase in other accounts payable and accrued expenses                                      157            503            660
  Increase in accrued severance pay, net                                                         6              4             10
                                                                                          --------       --------       --------

Net cash used in continuing operating activities                                            (2,056)        (2,310)        (4,471)
Net cash provided by (used in) discontinued operating activities                                --            (15)            75
                                                                                          --------       --------       --------

Total net cash used in operating activities                                                 (2,056)        (2,325)        (4,396)
                                                                                          --------       --------       --------

Cash flows from investing activities:
  Sales of property and equipment                                                                9             --              9
  Purchase of property and equipment                                                            (6)           (41)           (47)
                                                                                          --------       --------       --------

Net cash provided by (used in) continuing investing activities                                   3            (41)           (38)
Net cash used in discontinued investing activities                                              --             --            (15)
                                                                                          --------       --------       --------

Total net cash provided by (used in) investing activities                                        3            (41)           (53)
                                                                                          --------       --------       --------

Cash flows from financing activities:
  Issuance of shares and warrants, net                                                        *)--          7,017          7,017
                                                                                          --------       --------       --------

Net cash provided by continuing financing activities                                            --          7,017          7,017
Net cash provided by discontinued financing activities                                          --             --             35
                                                                                          --------       --------       --------

Total net cash provided by financing activities                                                 --          7,017          7,052
                                                                                          --------       --------       --------

Increase (decrease) in cash and cash equivalents                                            (2,053)         4,651          2,603
Cash and cash equivalents at beginning of period                                             4,656              5             --
                                                                                          --------       --------       --------

Cash and cash equivalents at end of period                                                $  2,603       $  4,656       $  2,603
                                                                                          ========       ========       ========

</TABLE>

*) Represents an amount lower than $ 1.

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


                                      F-6
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 1:- GENERAL

      a.    Tissera Inc. ("the Company") was incorporated  under the laws of the
            State  of  Washington  on  May  31,  2000.  The  Company  is in  the
            development  stage. The Company is engaged in developing and testing
            organ  transplantation  therapies  based  on an  approach  employing
            organ-specific precursor tissues.

            On  September  4, 2003,  the former  president of the Company (and a
            former major  shareholder)  entered into a share purchase  agreement
            ("the  Agreement")  with the Company's  existing  shareholders,  who
            purchased  15,000,000  shares  of the then  issued  and  outstanding
            18,036,000  shares of the Company's Common stock. In connection with
            the  agreement,  the president of the Company  resigned as president
            and sole  director of the  Company.  Also,  in  connection  with the
            Agreement,   the  Company  obtained  forgiveness  of  the  remaining
            promissory note of $ 10 and accrued  interest of $ 2 that was due on
            May 31, 2004 in respect of the  Company's  license to sell Bit Error
            Rate Testers ("the  License") and agreed to convert the License to a
            worldwide  non-exclusive  license.  Also,  in  connection  with  the
            Agreement, the former president of the Company agreed to forgive his
            loan, in the amount of $ 2.

            Subsequent  to the  Agreement,  the  management  of the  Company has
            decided to discontinue  all  activities  related to the sales of Bit
            Error  Rate  Testers  and to  engage  in the  development  of tissue
            transplant  technologies.  The  discontinuation of this activity was
            accounted   for  under  the  provision  of  Statement  of  Financial
            Accounting  Standard  No.  144  ("SFAS  144"),  "Accounting  for the
            Impairment or Disposal of Long-Lived Assets".

            The  statements  of  operations  for the year ended  July 31,  2005,
            include  a gain in the  amount  of $ 13,  reported  in  discontinued
            operations,  related  to the  forgiveness  of the  note and the loan
            described above.  Breakdown of income from  discontinued  operations
            related to discontinued operation is as follows:

                                                        Year ended July 31,
                                                   -----------------------------
                                                       2005            2004
                                                   -------------  --------------

            Extinguishment of debts and others     $           -  $           13
                                                   =============  ==============

            On October 8, 2003, the Company  entered into a research and license
            agreement  with  Yeda  Research  and  Development   Company  Limited
            ("Yeda"),  according  to which  Yeda  provided  the  Company  with a
            worldwide exclusive license to develop,  manufacture and sell Yeda's
            tissue  transplant  technologies.  Yeda is  entitled  to cancel  the
            agreement under certain conditions  determined in the agreement (see
            Note 2). The Company  currently  bases its entire  operations on the
            license provided from Yeda. Should Yeda terminate the agreement with
            the  Company,  the Company  will not be able to continue its current
            research operations.

            On October 9, 2003,  the  Company's  Board of Directors  resolved to
            change the name of the Company  from Bert Logic,  Inc. to  "Tissera,
            Inc".

      b.    On  October  27,  2003,  the  Company  incorporated  a  wholly-owned
            subsidiary  in Israel,  Tissera Ltd.  ("the  subsidiary"),  which is
            engaged in research and development.


                                      F-7
<PAGE>

                                                                    TISSERA INC.
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 1:- GENERAL (Cont.)

      c.    Going concern considerations:

            The  Company's  ability to continue to operate as a going concern is
            dependent on its ability to generate  sufficient  cash flows to meet
            its  obligations on a timely basis, to obtain  additional  financing
            and  to  ultimately  attain  profitability.  The  company  is in the
            development  stage and, as such,  has incurred  recurring  operating
            losses, has generated an accumulated deficit and has a negative cash
            flow from operating activities. The process of developing commercial
            products  will  require  significant  additional   expenditures  for
            research and  development,  maintaining the key technology  license,
            pre-clinical  testing  and  clinical  trials,  as well as  obtaining
            regulatory  approval.  These  activities,  together with general and
            administrative  expenses,  are  expected  to result  in  substantial
            operating losses in the foreseeable future.

            In the event the Company is unable to successfully raise capital and
            generate  revenues,  it is  unlikely  that  the  Company  will  have
            sufficient   cash  flows  and  liquidity  to  finance  its  business
            operations as currently  contemplated and thus will have to cease or
            delay  development  projects  until it is able to obtain  sufficient
            financing.  There can be no assurance that additional  funds will be
            available on terms acceptable to the Company, or at all.

            These conditions raise substantial doubt about the Company's ability
            to continue to operate as a going concern.  The financial statements
            do not include any adjustments to reflect the possible future effect
            on the  recoverability  and  classification of assets or the amounts
            and  classification  of liabilities that may result from the outcome
            of this uncertainly.

      d.    On March 10, 2005, the Company entered into an agreement in order to
            settle a dispute with certain investors (see Note 9c).

      e.    Risk factors:

            The Company  depends on Yeda to conduct its research and development
            activities.  As discussed in Note 2, the research services are to be
            provided  until April  2006.  Thereafter,  the Company  will have to
            negotiate for new research services to be received, whether, by Yeda
            or by other service providers. If Yeda fails to provide the research
            services or is  unwilling to continue to provide  research  services
            after April 2006 at terms that are  acceptable  to the Company,  the
            Company  may be  required  to seek  alternative  sources of research
            services. A change in service provider could result in delays in the
            research activities,  increase in expense and could adversely affect
            the Company's results of operations and cashflows.  In addition,  as
            discussed  in Note 2, Yeda may  terminate  the  Research and license
            agreement ("the Agreement") under certain conditions.


                                      F-8
<PAGE>

                                                                   TISSERA INC.
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 2:- RESEARCH AND LICENSE AGREEMENT

            On October 8, 2003, the Company  entered into a research and license
            agreement  ("the  Agreement")  with Yeda.  The Company  conducts the
            research for a period of three years,  at the Weizmann  Institute of
            Science  (the  commercialization  company  of  Yeda).  The  research
            relates to an invention comprising methods of organ  transplantation
            utilizing developing nephric tissue. The license that was granted to
            the Company  shall expire at the later of (i) the  expiration of the
            patents in the  country  of sale,  or (ii) 15 years from the date of
            receipt  of FDA new drug  approval  (in the United  States),  or the
            equivalent  in any other  country in which the products are sold. In
            addition,  Yeda may terminate the agreement if the Company will fail
            to achieve certain  commercialization and development  achievements,
            as defined in the agreement.  Currently,  the company  complies with
            all of the terms of the agreement.

            The Company  committed to grant Yeda, within 120 days of the date on
            which the  agreement  is signed,  (i) a warrant,  exercisable  at an
            aggregate  exercise  price of $ 0.9 to  purchase  up to 2.23% of the
            issued  and  outstanding  Common  stock of the  Company  immediately
            following  the  exercise  of  such  warrant,  and  (ii)  a  warrant,
            exercisable  at an aggregate  exercise price of $ 1.1 to purchase up
            to  2.67%  of the  issued  and  outstanding  shares  of the  Company
            immediately  following the exercise of such  warrant,  provided that
            the maximum  number of shares of Common stock that Yeda may exercise
            under the warrants  shall be 3,010,699 and  3,612,839,  respectively
            (the  number  of  shares  of  Common  stock  shall be  appropriately
            adjusted  in the event of stock  splits,  stock  dividends,  capital
            reorganizations,  reclassifications,  recapitalizations and the like
            as well as issuances or sales by the Company of shares for par value
            only,  for a  consideration  of  less  than  par  value  and  for no
            consideration,  all in accordance  with the terms and  conditions of
            said warrant).  Each such warrant shall be exercisable  for a period
            beginning  one year after the date on which the agreement is signed,
            and ending at the later of (a) one year following the termination of
            the agreement and (b) October 7, 2013. As of the balance sheet date,
            1,421,160 of the Company's shares of Common stock are underlying the
            warrants. The warrants shall be exercisable on a cashless basis.

            Until February 2005, the terms of certain  warrants had not yet been
            agreed upon by the parties.  On February  24, 2005,  the Company and
            Yeda came to an agreement regarding the terms of the warrants, which
            were issued in March 2005.

            Since the license is used for  research and  development  activities
            and no  alternative  use  exists  for the  license,  the cost of the
            license was recorded as research and development  expenses  (income)
            in the amount of $ (156) and $ 670 for the year ended July 31,  2005
            and,  2004,  respectively.  The  fair  value  of  the  warrants  was
            determined based on the number of shares  underlying the warrants as
            of the  balance  sheet  date.  The number of shares  underlying  the
            warrants as of the balance  sheet date was  determined  based on the
            actual issued and outstanding  shares of the Company and any options
            to acquire  Company's shares for a nominal  consideration,  totaling
            1,558,896 shares of Common stock.

            Prior to the  actual  issuance  of the  warrants,  the  value of the
            warrants for  recording  the research and  development  expenses was
            re-measured at each  reporting  period based on the number of shares
            underlying the warrants as of each reporting  period with the entire
            change  in the  fair  value of the  underlying  shares  reported  in
            research and development expenses.


                                      F-9
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 2:- RESEARCH AND LICENSE AGREEMENT (Cont.)

            After the issuance of the warrants,  since the warrants  entitle the
            investors to a final  percentage  of the  Company's  shares (up to a
            certain maximum number of shares), with each change in the number of
            the Company's issued and outstanding shares or the number of options
            with a nominal  exercise  price,  the fair  value of the  additional
            shares  underlying  the  warrants  will be recorded as research  and
            development  expenses.  Once the  number  of shares  underlying  the
            warrants will reach the maximum  number of shares that can be issued
            under  the   warrants,   the  warrants  will  cease  to  be  further
            re-measured.

            The Company  shall also pay Yeda the  following:  (i) with regard to
            the first year of the research  period  commencing on April 9, 2003,
            an amount of $ 900;  (ii) with  regard to the second  year and third
            year of  research,  an annual  amount which shall be not less than $
            900 and not more than $ 1,000, to be determined by mutual  agreement
            of the  parties no later than 30 days prior to the  commencement  of
            the  relevant  year.  The amounts  are paid in four equal  quarterly
            non-refundable installments,  payable in advance at the beginning of
            each  three-month  period  during such year.  If the parties fail to
            reach an agreement within the time frame referred to above regarding
            the amount of the research  budget  payable for the second and third
            year of the research period,  then the research budget for such year
            shall  be  $  900  and  Yeda  shall  procure  for  the  Company  the
            performance of research for such reduced amount.

            In July 2004,  the Company  signed a first addendum to the agreement
            with Yeda and committed to pay Yeda an amount of $ 900 in respect of
            the second year of the  research  period.  In  September  2005,  the
            Company  signed a second  addendum  to the  agreement  with Yeda and
            committed  to pay Yeda an  amount of $ 900 in  respect  of the third
            year of the research period.

            The Company  undertook to make its best efforts to commercialize the
            licensed products. The Company also agreed to pay Yeda a license fee
            of (i) $ 50 per year, to be paid commencing the first year after the
            completion of the research and  development  period;  (ii) 4% of net
            sales of all products  using the licensed  technology;  (iii) 33% of
            all sublicense fees for all agreements  entered into within one year
            following the agreement  date, and (iv) 16% of all  sublicense  fees
            for all agreements entered into after such one-year period.


                                      F-10
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES

            The  financial  statements  have been  prepared in  accordance  with
            accounting principles generally accepted in the United States ("U.S.
            GAAP").  The  significant   accounting   policies  followed  in  the
            preparation of the financial statements, on a consistent basis, are:

            a.    Financial statements in U.S. dollars:

                  The  functional  and reporting  currency of the Company is the
                  U.S. dollar.

                  The  functional  currency  of the  Company  is the U.S  dollar
                  ("dollar")  since the dollar is the  currency  of the  primary
                  economic  environment  in which the Company has  operated  and
                  expects to continue to operate in the  foreseeable  future.  A
                  majority of the  transactions of the subsidiary is recorded in
                  new Israeli shekels ("NIS");  however, all of the subsidiary's
                  revenues from  transactions  with the Company are generated in
                  dollars  and all  intercompany  balances  are  denominated  in
                  dollars.   In   addition,   a   substantial   portion  of  the
                  subsidiary's  costs  is  incurred  in  dollars.   Accordingly,
                  management  has  designated  the dollar as the currency of its
                  and its  subsidiary's  primary  economic  environment and thus
                  their functional and reporting currency.

                  Transactions and balances denominated in dollars are presented
                  at  their  original  amounts.   Non-dollar   transactions  and
                  balances have been  remeasured  to dollars in accordance  with
                  the provisions of Statement of Financial  Accounting  Standard
                  No. 52 "Foreign Currency  Translation".  All transaction gains
                  and losses from  remeasurement of monetary balance sheet items
                  denominated  in  non-dollar  currencies  are  reflected in the
                  statement of  operations as financial  income or expenses,  as
                  appropriate.

            b.    Principles of consolidation:

                  The consolidated  financial statements include the accounts of
                  the  Company  and its  wholly-owned  subsidiary.  Intercompany
                  balances   and   transactions   have  been   eliminated   upon
                  consolidation.

            c.    Cash equivalents:

                  Cash equivalents are short-term highly liquid investments that
                  are  readily  convertible  to cash  with  maturities  of three
                  months or less as of the date acquired.


                                      F-11
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            d.    Property and equipment

                  Property and  equipment are stated at cost,  less  accumulated
                  depreciation.  Depreciation is calculated by the straight-line
                  method over the  estimated  useful  lives of the  assets.  The
                  annual depreciation rates are as follows:

                                                                  %
                                                      --------------------------

                  Office furniture and equipment                  7
                  Computers, software and
                    electronic equipment                         33
                  Leasehold improvements              Over the term of the lease

            e.    Impairment of long-lived assets:

                  The Company's long-lived assets are reviewed for impairment in
                  accordance with Statement of Financial Accounting Standard No.
                  144  "Accounting  for the Impairment or Disposal of Long-Lived
                  Assets"  ("SFAS  No.  144")  whenever  events  or  changes  in
                  circumstances  indicate  that the carrying  amount of an asset
                  may not be  recoverable.  Recoverability  of assets to be held
                  and used is measured by a comparison of the carrying amount of
                  the assets to the future  undiscounted  cash flows expected to
                  be generated by the assets.  If such assets are  considered to
                  be impaired,  the  impairment  to be recognized is measured by
                  the amount by which the carrying  amount of the assets exceeds
                  their fair value.  As of July 31, 2005, no  impairment  losses
                  have been identified.

            f.    Research and development costs:

                  Research  and  development  costs are  charged to  expenses as
                  incurred.

            g.    Severance pay:

                  The  liability  of  the   subsidiary   for  severance  pay  is
                  calculated pursuant to the Severance Pay Law in Israel,  based
                  on the most recent salary of the  employees  multiplied by the
                  number of years of employment as of the balance sheet date and
                  is presented on an undiscounted basis.

                  The subsidiary's  employees are entitled to one month's salary
                  for  each  year  of  employment  or  a  portion  thereof.  The
                  Company's liability for all of its employees is fully provided
                  by monthly deposits with insurance policies and by an accrual.
                  The value of these  policies  is  recorded  as an asset in the
                  Company's balance sheet.

                  The deposited  funds  include  profits  accumulated  up to the
                  balance sheet date. The deposited  funds may be withdrawn only
                  upon the  fulfillment of the  obligation  pursuant to Israel's
                  Severance  Pay  Law or  labor  agreements.  The  value  of the
                  deposited  funds is based  on the  cash  surrendered  value of
                  these policies, and includes immaterial profits.

                  Severance  expenses for the years ended July 31, 2005 and 2004
                  amounted to $ 27 and $ 12, respectively.


                                      F-12
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            h.    Use of estimates:

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

            i.    Accounting for share-based compensation:

                  The Company has elected to follow Accounting  Principles Board
                  Opinion No. 25,  "Accounting  for Stock  Issued to  Employees"
                  ("APB-25"),  and FASB  Interpretation  No. 44 "Accounting  for
                  Certain Transactions  Involving Stock Compensation" ("FIN 44")
                  in accounting for its employee  share  options.  Under APB-25,
                  when the exercise price of the Company's share options is less
                  than the market price of the underlying  shares on the date of
                  grant,  compensation  expense is recognized  over the option's
                  vesting period.

                  Pro forma information regarding net loss and loss per share is
                  required by  Statement of  Financial  Accounting  Standard No.
                  123,  and  has  been  determined   assuming  the  Company  had
                  accounted for its employee  share options under the fair value
                  method prescribed by that Statement.  The fair value for these
                  options   was   estimated   on  the  date  of  grant  using  a
                  Black-Scholes   option  pricing  model,   with  the  following
                  weighted-average  assumptions for the year ended July 31, 2005
                  and  2004:  weighted  average  volatility  of 217%  and  129%,
                  risk-free  interest rates of 3.84% and 2.45%,  dividend yields
                  of 0% for both years, and a weighted-average  expected life of
                  the options of 7.79 and 5 years, respectively.

                  For  purposes of pro forma  disclosures,  the  estimated  fair
                  value of the  options  is  amortized  as an  expense  over the
                  option's vesting period.  The Company's pro forma  information
                  is as follows:

<TABLE>
<CAPTION>
                                                                                                 Year ended July 31,
                                                                                          ---------------------------------
                                                                                               2005              2004
                                                                                          ---------------   ---------------

                      <S>                                                                 <C>               <C>
                      Net loss as reported                                                $       3,983     $        22,529

                      Deduct: share-based employee compensation expense included in
                        reported net loss in accordance with APB-25                                  (176)           (1,130)
                      Add: stock-based employee compensation expense determined under
                        fair value method                                                             975             1,507
                                                                                          ---------------   ---------------

                      Pro forma net loss                                                  $         4,782   $        22,906
                                                                                          ===============   ===============

                      Pro forma net loss per share (basic and diluted)                    $          0.17   $          1.05
                                                                                          ===============   ===============

                      Net loss per share (basic and diluted), as reported                 $          0.14   $          1.04
                                                                                          ===============   ===============
</TABLE>


                                      F-13
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

                  The Company  applies SFAS 123 and EITF 96-18  "Accounting  for
                  Equity Instruments That are Issued to Other Than Employees for
                  Acquiring,  or in Conjunction with Selling, Goods or Services"
                  ("EITF 96-18") with respect to options and warrants  issued to
                  non-employees.  SFAS 123 and EITF 96-18  require the use of an
                  option  valuation  model  to  measure  the  fair  value of the
                  options at the grant date.

            j.    Basic and diluted net loss per share:

                  Basic net loss per  share is  computed  based on the  weighted
                  average number of shares outstanding during each year. Diluted
                  net loss per share is computed  based on the weighted  average
                  number  of  shares  outstanding  during  each  year,  plus the
                  dilutive potential of the Common stock considered  outstanding
                  during the year,  in  accordance  with  Statement of Financial
                  Standard No. 128, "Earnings per Share." ("SFAS No. 128").

                  All outstanding  share options and warrants have been excluded
                  from the  calculation  of the  diluted  loss per share for the
                  year ended July 31, 2005,  because all such securities have an
                  anti-dilutive effect.

                  Such outstanding securities consist of the following:

                                                          Year ended
                                                            July 31,
                                                             2005
                                                          ----------

                       Options                             4,418,757
                       Warrants                           19,172,278
                                                          ----------

                       Total                              23,591,035
                                                          ==========

            k.    Income taxes:

                  The Company  and its  subsidiary  account for income  taxes in
                  accordance with Statement of Financial Accounting Standard No.
                  109,  "Accounting for Income Taxes".  This Statement  requires
                  the use of the  liability  method  of  accounting  for  income
                  taxes,  whereby  deferred  tax  asset  and  liability  account
                  balances  are  determined  based  on the  differences  between
                  financial  reporting  and tax bases of assets and  liabilities
                  and are  measured  using the  enacted  tax rates and laws that
                  will  be in  effect  when  the  differences  are  expected  to
                  reverse.  The Company and its  subsidiary  provide a valuation
                  allowance,  if  necessary,  to reduce  deferred  tax assets to
                  their estimated realizable value.

            l.    Fair value of financial instruments:

                  The following methods and assumptions were used by the Company
                  and its subsidiary in estimating their fair value  disclosures
                  for financial instruments:

                  The  carrying  values of cash and cash  equivalents,  accounts
                  receivable,   trade  payables  and  other  accounts   payable,
                  approximate their fair value due to the short-term maturity of
                  these instruments.


                                      F-14
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)


NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            m.    Concentrations of credit risks:

                  Financial instruments that potentially subject the Company and
                  its  subsidiary  to  concentrations  of  credit  risk  consist
                  principally of cash and cash equivalents.

                  Cash and cash equivalents are deposited in banks in Israel and
                  in the United  States.  Such deposits in the United States may
                  be in excess of insured  limits  and are not  insured in other
                  jurisdictions.   Management   believes   that  the   financial
                  institutions   that  hold  the   Company's   investments   are
                  financially sound and, accordingly, minimal credit risk exists
                  with respect to these investments.

                  The Company has no  off-balance-sheet  concentration of credit
                  risk such as foreign exchange  contracts,  option contracts or
                  other foreign hedging arrangements.

            n.    Impact of recently issued accounting standards:

                  On December 16, 2004, the Financial Accounting Standards Board
                  (FASB)  issued  FASB   Statement   No.  123  (revised   2004),
                  "Share-Based  Payment"  ("Statement   123(R)"),   which  is  a
                  revision of FASB Statement No. 123, Accounting for Stock-Based
                  Compensation.  Statement 123(R)  supersedes APB 25, and amends
                  FASB Statement No. 95,  "Statement of Cash Flows".  Generally,
                  the  approach in  Statement  123(R) is similar to the approach
                  described in Statement 123. However, Statement 123(R) requires
                  all  share-based  payments to employees,  including  grants of
                  employee  stock  options,  to  be  recognized  in  the  income
                  statement based on their fair values.  Pro forma disclosure is
                  no longer an  alternative.  The new Standard will be effective
                  for the Company in the first interim  period  beginning  after
                  August 1, 2006.

                  As permitted by Statement 123, the company currently  accounts
                  for share-based payments to employees using APB 25's intrinsic
                  value method. Accordingly,  the adoption of Statement 123(R)'s
                  fair  value  method  will  have a  significant  impact  on the
                  Company result of operations,  although it will have no impact
                  on the  Company  overall  financial  position.  The  impact of
                  adoption of Statement  123(R) cannot be predicted at this time
                  because  it will  depend  on levels  of  share-based  payments
                  granted  in the  future.  However,  had  the  Company  adopted
                  Statement 123(R) in prior periods, the impact of that standard
                  would  have  approximated  the  impact  of  Statement  123  as
                  described in the disclosure of pro forma net loss and loss per
                  share in Note 3i to the consolidated financial statements.

                  In March 2005,  the SEC issued Staff  Accounting  Bulletin No.
                  107  ("SAB  107")  to  give  guidance  on   implementation  of
                  Statement   123R,   which  the   Company   will   consider  in
                  implementing statement 123R.


                                      F-15
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)


NOTE 4:- ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

                                                                   July 31,
                                                             -------------------
                                                               2005       2004
                                                             --------   --------
               Government authorities                        $      7   $     16
               Prepaid expenses and others                        258        221
                                                             --------   --------

                                                             $    265   $    237
                                                             ========   ========


NOTE 5:- PROPERTY AND EQUIPMENT

               Cost:
                 Office furniture and equipment              $      2   $      7
                 Computer software and electronic equipment        29         28
                 Leasehold improvements                             6          6
                                                             --------   --------

                                                                   37         41
                                                             --------   --------
               Accumulated depreciation:
                 Office furniture and equipment                  *) -       *) -
                 Computer software and electronic equipment        10          2
                 Leasehold improvements                             6          1
                                                             --------   --------

                                                                   16          3
                                                             --------   --------

               Depreciated cost                              $     21   $     38
                                                             ========   ========

*) Represents an amount lower than $ 1.


NOTE 6:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES


                Government authorities                       $    331   $    318
                Employees and payroll accruals                     74         54
                Accrued expenses                                  255        131
                                                             --------   --------

                                                             $    660   $    503
                                                             ========   ========


                                      F-16
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 7:- COMMITMENTS AND CONTINGENCIES

            a.    The  facilities  and motor  vehicles of the Company are rented
                  under operating leases.  Aggregate minimum rental  commitments
                  under  the  non-cancelable  lease as of July  31,  2005 are as
                  follows:

                   First year                      $  20
                   Second year                         5
                                                   -----

                                                   $  25
                                                   =====

            b.    The Company's subsidiary obtained bank guarantee in the amount
                  of $ 5 to secure a rent agreement.

            c.    On  September  7,  2004,  the Board of  Directors  decided  to
                  terminate the employment of the Chief Executive Officer of the
                  Company  ("the  Former  CEO").  According  to the Former CEO's
                  employment  agreement,  the Former CEO is entitled to payments
                  totaling  approximately  $ 78 upon  termination  of employment
                  with the Company.  On December  21, 2004, a claim  against the
                  Company was submitted to the Israeli labor court by the Former
                  CEO for a payment of  approximately $ 125 (NIS 564) in respect
                  of  payments  allegedly  due to her.  The  Company has filed a
                  statement  of defense  against  the Former  CEO's  claim.  The
                  Company's management and its legal advisors are of the opinion
                  that the Company has good defense arguments against the claim.
                  As of July 31,  2005,  a provision  in the amount of $ 100, in
                  respect of net  salary  expenses  was  recorded  in  operating
                  expenses, with respect to the Former CEO.

            d.    1.    On June 5, 2005, the former CEO submitted to the Company
                        a third party  notice by which the Company was  informed
                        that  the  former  CEO was the  beneficiary  of  397,000
                        shares  of Common  Stock,  $0.0001  par value  issued to
                        service providers on January 15, 2004 for services.  The
                        fair  value of the  shares  in the  amount  of $ 834 was
                        recorded as general and  administrative  expenses at the
                        grant date.

                  2.    On  November  4,  2004,   the  Board  of  Directors  has
                        questioned the procedures  according to which a bonus in
                        the  amount of $ 110 that was  granted to the Former CEO
                        in March  2004 and  decided  to cancel  the bonus and to
                        demand  the  Former  CEO to repay the  bonus.  The bonus
                        amount was  recorded  as  accounts  receivable,  and was
                        fully provided to expenses as a doubtful debt.

                  3.    On November 4, 2004,  the  Company's  Board of Directors
                        decided  to demand  from the  Former CEO to repay to the
                        Company the amount of withholding tax exposure  totaling
                        $ 538 to be paid by the Company to the tax  authorities,
                        in  respect  of the  exercise  of  options.  Based  on a
                        preliminary  discussion  with the Income Tax Authorities
                        and  consultations,  the Company recorded a liability to
                        the   tax   authorities   in  the   amount   of  $  269.
                        Corresponding  receivable from the Former CEO totaling $
                        269  was  recorded  and  fully  provided  as a  doubtful
                        account as of July 31, 2004.


                                      F-17
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 7:- COMMITMENTS AND CONTINGENCIES (Cont.)

                  4.    During  2004,  the Former  CEO's  brother,  who was also
                        employed by the Company,  was granted  280,000 shares of
                        Common stock for no cash  consideration.  In March 2004,
                        the Board  decided  to grant him an  additional  280,000
                        warrants to purchase 280,000 shares of Common stock, the
                        vesting  of which is  subject  to  signing a  definitive
                        employment  agreement  with the Company.  Such agreement
                        was never  entered  into.  As a result,  on  November 4,
                        2004, the Board of Directors cancelled the warrants. The
                        cancelled  warrants are not presented in these financial
                        statements, nor was any compensation expense recorded in
                        respect of these warrants.

                  5.    The Company filed a counter claim against its Former CEO
                        in the amount of approximately $ 2,078 (NIS 9,405) which
                        includes inter alia the issues described in d1-d4 above.
                        The Company's  management  and its legal advisors are of
                        the  opinion  that  the  Company  has  reasonable   good
                        assertion in its counter claim.

            e.    On July 11,  2005,  the former CEO  submitted to the Company a
                  letter  claiming that the Company  included in its Form 10-QSB
                  filed on June 24, 2005  slanderous  allegations  regarding the
                  former CEO. The former CEO demanded  retraction  and asserting
                  damages of at least $ 23. The Company's  management denies the
                  claim.

            f.    In March 2004, the Former CEO was granted 2,267,046 options to
                  purchase a total of 2,267,046  shares of Common stock,  out of
                  which 270,000  options were  exercised  into 249,859 shares of
                  Common stock on a cashless basis.  The total number of options
                  to which the Former CEO is entitled  should have been based on
                  a formula that was determined in the agreement with the Former
                  CEO. However, the number of options that were granted in March
                  2004 was incorrect.  In November 2004, the Company's  Board of
                  Directors  decided to amend the  number of options  granted to
                  the Former CEO to a total of  2,042,551  options to purchase a
                  total  of  2,042,551  shares  of  Common  stock.  The  amended
                  calculation  is  based  on  the  formula   determined  in  the
                  agreement.

                  The number of options and related compensation recorded in the
                  financial statements are based on the revised calculation.

            g.    On September 7, 2004, certain  shareholders  demanded from the
                  Former CEO to repay the Company  the amount of $ 1,074  (which
                  is the  value of the  shares,  that the  Company  issued  as a
                  result  of  the  Former   CEO's   cashless   exercise  of  the
                  abovementioned  options,  at the date of  exercise,  and which
                  were sold by the Former  CEO),  claiming  that the exercise of
                  the options was executed before the end of the vesting period.
                  In addition, the shareholders demanded that the Former CEO pay
                  the Company  compensation  in the amount of $ 645 for damages.
                  Management  of the Company and its legal  advisors  are of the
                  opinion that the vast majority of the  assertions  are against
                  the Former CEO and not against the Company. The Company denies
                  the assertions that may imply to the Company's  responsibility
                  and as a result,  no provision  was recorded in the  financial
                  statements.


                                      F-18
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands

NOTE 8:- TAXES ON INCOME

            a.    Deferred income taxes:

                  Deferred income taxes reflect the net tax effects of temporary
                  differences   between  the  carrying  amounts  of  assets  and
                  liabilities for financial  reporting  purposes and the amounts
                  used for income tax  purposes.  Significant  components of the
                  Company's deferred tax assets are as follows:
<TABLE>
<CAPTION>
                                                                                                  July 31,
                                                                                     -----------------------------------
                                                                                           2005               2004
                                                                                     ----------------   ----------------
                  <S>                                                                <C>                <C>
                  Operating loss carryforward                                        $          1,575   $            805
                  Reserves and allowances                                                           9                  7
                                                                                     ----------------   ----------------


                  Net deferred tax asset before valuation allowance                             1,584                812
                  Valuation allowance                                                          (1,584)              (812)
                                                                                     ----------------   ----------------

                  Net deferred tax asset                                             $             --   $             --
                                                                                     ================   ================
</TABLE>

                  As of July  31,  2005,  the  Company  has  provided  valuation
                  allowances  of $ 1,584  in  respect  of  deferred  tax  assets
                  resulting  from tax loss  carryforwards  and  other  temporary
                  differences.  Management  currently  believes  that  since the
                  Company  has a history of losses,  it is more  likely than not
                  that the deferred tax  regarding  the loss  carryforwards  and
                  other  temporary  differences  will  not  be  realized  in the
                  foreseeable future.

            b.    Available carryforward tax losses:

                  As of July 31, 2005, the Company has an  accumulated  tax loss
                  carryforward of approximately $ 3,940. Carryforward tax losses
                  in the U.S. can be carried  forward and offset against taxable
                  income in the future for a period of 20 years.  Utilization of
                  U.S. net operating losses may be subject to substantial annual
                  limitations due to the "change in ownership" provisions of the
                  Internal  Revenue Code of 1986 and similar  state  provisions.
                  The  annual  limitation  may result in the  expiration  of net
                  operating losses before utilization.

            c.    Loss before taxes on income consists of the following:
<TABLE>
<CAPTION>
                                                                                                    Year ended
                                                                                                     July 31,
                                                                                     --------------------------------------
                                                                                            2005                 2004
                                                                                     -----------------   ------------------
                  <S>                                                                <C>                <C>
                  United States                                                      $          (4,009)  $          (22,584)
                  Israel                                                                            41                   65
                                                                                     -----------------   ------------------

                                                                                     $          (3,968)  $          (22,519)
                                                                                     =================   ==================
</TABLE>


                                      F-19
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share data)

NOTE 8:- TAXES ON INCOME (Cont.)

            d.    Taxes on income included in the statement of operations:
<TABLE>
<CAPTION>

                                                                                                   Year ended
                                                                                                    July 31,
                                                                                     --------------------------------------
                                                                                            2005                 2004
                                                                                     -----------------   ------------------
                  <S>                                                                <C>                <C>
                  Current taxes:
                    Domestic                                                         $              --   $               --
                    Foreign *)                                                                      15                   23
                                                                                     -----------------   ------------------

                                                                                     $              15   $               23
                                                                                     =================   ==================
</TABLE>

                  *)    In  2004,  the  Company  signed  an  agreement  with its
                        subsidiary  effective as of October 27, 2003,  according
                        to  which  the   subsidiary   will   provide   research,
                        development  and  other  services  to the  Company.  The
                        Company will  reimburse the subsidiary for expenses on a
                        cost plus 10% basis.

            e.    Shares of main  reconciling  item,  between the  statutory tax
                  rate  of  the  Company  and  the  effective  tax  rate  is the
                  non-recognition of tax benefits from accumulated net operating
                  losses carry forward due to the uncertainty of the realization
                  of such tax benefits.


NOTE 9:- STOCK CAPITAL

            a.    The rights of Common stock are as follows:

                  Common  shares  confer on their  holders  the right to receive
                  notice to  participate  and vote in  general  meetings  of the
                  Company,  the right to a share in the  excess  of assets  upon
                  liquidation   of  the  Company,   and  the  right  to  receive
                  dividends, if declared.

                  Shares of Common stock are registered  and publicly  traded on
                  the  Over-the-Counter  Bulletin  Board service of the National
                  Association of Securities Dealers, Inc. under the symbol TSSR.

            b.    Bonus shares:

                  On  November  4,  2003,  it was  resolved  to allot a total of
                  12,024,000  bonus shares at the rate of three fully-paid bonus
                  shares for each then outstanding share. All the shares and per
                  share amounts have been adjusted to give retroactive effect to
                  the allotment.


                                      F-20
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 9:- STOCK CAPITAL (Cont.)

            c.    Investments, warrants and options:

                  Private placements

                  1.    On  February 1, 2004,  the  Company  completed a private
                        placement  ("PPM") for the sale of 1,767,200  units at a
                        price  per unit of $ 1.25.  Each  unit  consists  of one
                        Common share and three Common shares purchase  warrants.
                        The Company  granted the  investors  5,301,600  warrants
                        with an exercise price in a range of $ 3.75 - $ 6.00 per
                        share. The warrants are exercisable  within periods that
                        range from six months to three  years.  The  contractual
                        life of the  warrants  ranges  from  one  year to  three
                        years.

                  2.    On March 18, 2004,  the Company  completed an additional
                        PPM for the sale of 3,142,858  units at a price per unit
                        of $ 1.75.  Each unit  consists of one Common  share and
                        three  Common   shares   purchase   warrants  that  were
                        exercisable  at a  price  range  of $ 3.75 - $ 6.00  per
                        share. The warrants were exercisable within periods that
                        range from six months to three years. In order to settle
                        a dispute with the investors in March 2005,  the Company
                        entered into a Settlement  Agreement in which it amended
                        the terms of the private offering as follows:

                        The Company  reduced the  exercise  price of each of the
                        warrants to $ 0.50.

                        The Company  extended  the period over which the Class A
                        Common Stock Purchase Warrants can be exercised from one
                        year from March 2004 to one year from the effective date
                        of  the  Form  SB-2,  the  SB-2  become  effective  on 2
                        September, 2005.

                        The period  over  which  Class B Common  Stock  Purchase
                        Warrants  and  Class C Common  Stock  Purchase  Warrants
                        remained  the same and they are  exercisable  until  two
                        years   and  three   years   after   March   18,   2004,
                        respectively.

                        In  addition,  the Company  issued  Class D Common Stock
                        Purchase  Warrants to purchase an aggregate of 6,285,716
                        shares  of  Common  stock.  The  Class  D  Common  Stock
                        Purchase  Warrants are  exercisable  for a period of one
                        year  from the  effective  date of the  Form  SB-2 at an
                        exercise price of $ 0.15 per share. The Company recorded
                        general and  administration  expenses in the amount of $
                        1,980,  calculated  as the  difference  between the fair
                        value of the  warrants  that were  granted  on March 18,
                        2004 at the  date of the  settlement  agreement  and the
                        fair value of the  warrants  granted and modified at the
                        date of the  settlement  agreement,  in  respect  of the
                        settlement agreement.

                  3.    In connection with the second PPM the Company granted in
                        2004 to certain  brokers  172,480  warrants  to purchase
                        172,480 shares of Common stock at an exercise price of $
                        0.01 per share and 397,440  warrants to purchase 397,440
                        shares of Common  stock at  exercise  prices  that range
                        between $ 3.75 and $ 6.00 per share. As of July 31, 2005
                        and  2004,  the  brokers  exercised  25,200  and  53,800
                        warrants  into 25,200 and 53,800 shares of Common stock,
                        respectively.


                                      F-21
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 9:- STOCK CAPITAL (Cont.)

                  Shares and warrants to service providers

                  1.    The Company  granted  3,607,199 fully vested warrants to
                        purchase  Common stock at an exercise  price of $ 0.0001
                        per share,  150,000 warrants to purchase Common stock at
                        an exercise price of $ 0.01 per share,  600,000 warrants
                        to  purchase  600,000  shares  of  Common  stock  at  an
                        exercise price of $ 1 per share and 2,777,000  shares of
                        Common stock at no  consideration.  On November 4, 2004,
                        the Company's  Board of Directors  decided to grant to a
                        member of its advisory board 200,000 options to purchase
                        200,000 shares of Common stock at an exercise price of $
                        1 per share on a cashless basis. The options vest over a
                        period of three  years.  The  warrants  and shares  were
                        granted  to  service  providers  and to  advisory  board
                        members,   in  exchange  for  research  and  development
                        services  and  general  and   administrative   services.
                        3,340,981  warrants are fully vested as of July 31, 2005
                        and 1,016,215 warrants vest over a period of three years
                        ending  March 6, 2007.  The Company  accounted  for such
                        warrants and shares under the  provisions of EITF 96-18.
                        The fair value of fully  vested  warrants and shares was
                        recorded  as  research  and  development   expenses  and
                        general and  administrative  expenses at the grant date.
                        The fair value of the warrants  that vest over the three
                        years period is amortized as an expense over the vesting
                        period.  As of July 31, 2005 and 2004,  0 and  1,177,477
                        warrants were exercised  into 0 and 1,177,477  shares of
                        Common stock, respectively.

                  2.    Summary of warrants  issued to service  providers and to
                        investors:

                        The Company's  outstanding warrants that were granted to
                        service  providers  and to investors as of July 31, 2005
                        are as follows:
<TABLE>
<CAPTION>

                                             Number of      Exercise      Warrants        Exercisable
                        Issuance date        warrants        price       exercisable        through
                        -------------        --------        -----       -----------        -------
<S>                     <C>                 <C>            <C>           <C>             <C>
                        January 2004        1,519,815      $   *)-       1,519,815       January 2014
                        January 2004          150,000      $  0.01         150,000       January 2009
                        February 2004       1,899,680      $   4.5       1,899,680       February 2006
                        February 2004       1,899,680      $     6       1,899,680       February 2007
                        February 2004          93,480      $  0.01          93,480       February 2006
                        March 2004            493,692      $   *)-         493,692       March 2009
                        March 2004            416,215      $   *)-         138,738       March 2009
                        March 2004            200,000      $     1          88,889       March 2009
                        March 2004          3,142,858      $   0.5       3,142,858       March 2006
                        March 2004          3,142,858      $   0.5       3,142,858       March 2007
                        March 2004          3,142,858      $   0.5       3,142,858       September 2006
                        April 2004            200,000      $     1          88,889       April 2009
                        November 2004         200,000      $     1          50,000       November 2010
                        February 2005       1,421,160      $   *)-       1,421,160       October 2013
                        March 2005          6,285,716      $  0.15              --       September 2007
                                           ----------                  ----------
                                           24,208,012                  17,272,597
                                           ==========                  ==========
</TABLE>


                        *)    Represents an amount lower than $ 0.01.


                                      F-22
<PAGE>


                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

NOTE 9:- STOCK CAPITAL (Cont.)

                        The fair value of the warrants to service  providers was
                        estimated on the date of grant or at each balance  sheet
                        date (as applicable), using Black-Scholes option pricing
                        model, with the following  weighted-average  assumptions
                        for 2005 and 2004:  weighted average  volatility of 154%
                        and 135%,  risk-free  interest  rates of 3.73% and 3.25%
                        dividend  yields of 0% and a weighted  average  expected
                        life of the options of five years, respectively.

                  Shares and options to employees and to directors

                  1.    During 2004,  the Company  granted two of its  directors
                        541,080  options  to  purchase  541,080  shares  of  the
                        Company's  Common stock at an exercise  price of $ 1 per
                        share.  The options  vest over a period of three  years.
                        The  Company   accounted  for  such  options  under  the
                        provision of APB 25, since the optionees are entitled to
                        exercise their options on a cashless basis,  the Company
                        applied variable accounting and the compensation related
                        to   the   options   was   recorded   as   general   and
                        administrative expenses over the vesting period based on
                        the  market  price  of  the  Company's   stock  at  each
                        reporting  period.  As of July 31, 2005 and 2004,  0 and
                        67,635  options were  exercised into 0 and 52,278 shares
                        of Common stock on a cashless basis, respectively.

                        During  March  2004,  the  Company  granted  to  certain
                        employees 2,455,884 options to purchase 2,455,884 shares
                        of the Company's  Common stock at an exercise price of $
                        0.30 per share (including 2,042,551 options described in
                        note 7e). The options vest over a period of three years.
                        The  Company   accounted  for  such  options  under  the
                        provision of APB 25. Since the optionees are entitled to
                        exercise their options on a cashless basis,  the Company
                        applied variable accounting and the compensation related
                        to the options was recorded as research and  development
                        and general and administrative expenses over the vesting
                        period based on the market price of the Company's  stock
                        at such  reporting  period.  In  addition,  the  Company
                        granted  in 2004 to the  former  CEO's  brother  280,000
                        shares of Common stock at no consideration.

                        During  the years  ended July 31,  2005 and 2004,  0 and
                        281,112 options were exercised into 0 and 260,211 shares
                        of Common  stock of the  Company,  on a cashless  basis,
                        respectively.

                        On May  25,  2004,  the  Company  granted  to a  certain
                        employee  10,090 fully vested  shares of Common stock at
                        no consideration.

                        In  November  2004,  the  Company  signed an  employment
                        agreement with its new CEO,  according to which, the CEO
                        will be granted 1,500,000 options to purchase  1,500,000
                        shares at an  exercise  price of $ 0.30 per  share.  The
                        options will vest over a period of two years.

                        In  February  2005,  the  Company's  Board of  Directors
                        decided to grant a director, 270,540 options to purchase
                        270,540 shares of Common stock at an exercise price of $
                        0.31 per share.  The  options  vest over a period of two
                        years commencing March 15, 2005.


                                      F-23
<PAGE>


                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)


NOTE 9:-  STOCK CAPITAL (Cont.)
<TABLE>
<CAPTION>

             2.     A summary of the Company's  option  activity  related to options to employees  and  directors,
                    and related information is as follows:


                                                              July 31, 2005                  July 31, 2004
                                                     ------------------------------- ------------------------------
                                                                       Weighted                        Weighted
                                                       Amount of        average        Amount of        average
                                                        options      exercise price     options      exercise price
                                                     -------------- ---------------- -------------- ---------------
<S>                                                   <C>            <C>              <C>            <C>
                     Outstanding at the beginning
                       of the year                    2,648,217      $     0.425              -      $    -

                     Granted                          1,770,540      $     0.302      2,996,964      $    0.426

                     Exercised                                -      $     -          (348,747)      $    0.435
                                                     --------------                  --------------

                     Outstanding at the end of
                       the year                       4,418,757      $     0.376      2,648,217      $    0.425
                                                     ============== ================ ============== ===============

                     Exercisable options at the
                       end of the year                1,974,553      $     0.372      372,141        $    0.342
                                                     ============== ================ ============== ===============
</TABLE>
<TABLE>
<CAPTION>

             3.     The options  outstanding  as of July 31,  2005,  have been  separated  into ranges of exercise
                    price, as follows:

                                                                                                     Options
                                              Options outstanding        Weighted average          exercisable
                          Exercise               as of July 31,       remaining contractual       as of July 31,
                            price                    2005                     life                     2005
                    ----------------------   ----------------------  ------------------------   -------------------
<S>                         <C>                      <C>                      <C>                    <C>
                                                                              Years
                                                                     ------------------------

                            $   1                      743,985                3.54                     247,995
                            $ 0.3                    3,674,772                5.80                   1,726,558
                                             ----------------------                             -------------------

                                                     4,418,757                                       1,974,553
                                             ======================                             ===================
</TABLE>
<TABLE>
<CAPTION>

             4.     All options  were granted  with  exercise  prices that were lower than the market price of the
                    Company's  Common  stock on the date of grant.  Weighted  average  fair  values  and  weighted
                    average  exercise  prices of options  whose  exercise  price is lower than the market price of
                    the shares at date of grant are as follows:

                                                                                                 July 31,
                                                                                      -----------------------------
                                                                                          2005            2004
                                                                                      -------------- --------------
<S>                                                                                     <C>            <C>

                    Weighted average exercise price                                     $    0.376     $      0.425
                    Weighted average fair value on date of grant                        $    0.624     $      0.797

                    Compensation  expenses  recorded  by  the  Company  in  respect  of its  share-based  employee
                    compensation awards amounted to $ 176 for the year ended July 31, 2005.
</TABLE>


                                      F-24
<PAGE>


                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)


NOTE 10:- TRANSACTIONS WITH RELATED PARTIES
<TABLE>
<CAPTION>

          a.  From April 2003 until October 2003, funds raised and expenses  paid by the Company were managed by
              certain shareholders through a trustee, at no consideration.

          b.  As for claims, see Notes 7c, d, f.

          c.  As for options granted, see Notes 7e and Note 9d(1).


                                                                                      Year ended July 31,
                                                                             --------------------------------------
                                                                                   2005                 2004
                                                                             -----------------   ------------------
<S>                                                                           <C>                 <C>
              Fees and related benefits and compensation expenses in
                respect of options granted to members of the Board of
                Directors                                                     $         287       $         984
                                                                             =================   ==================
</TABLE>


NOTE 11:- FINANCIAL INCOME, NET
<TABLE>
<CAPTION>

<S>                                                                           <C>                 <C>
            Income:
              Interest income                                                 $          78       $          12
                                                                             -----------------   ------------------

            Expenses
              Bank charges                                                               10                  10
                                                                             -----------------   ------------------

                                                                              $          68       $           2
                                                                             =================   ==================
</TABLE>




                               - - - - - - - - - -

                                      F-25