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, 2004.

 |_| 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)

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

                                 AMOS EIRAN, CEO
                               GALGALEY HAPLADA 11
                                 THIRD ENTRANCE
                                    3RD FLOOR
                                  HERZLIA 46733
                                     ISRAEL
                                  +972-36344107

               (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, 2004.

At July 31, 2004, the number of shares outstanding of the registrant's Common
Stock, $0.0001 par value (the only class of voting stock), was 27,556,914.


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                                TABLE OF CONTENTS

                                     PART I

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

Item 2.  Description of Property. . . . . . . . . . . . . . . . . . . . . . .. 5

Item 3.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Item 4.  Submission  Of  Matters  To  A Vote Of Security Holders. . . . . . .  5

                                    PART II

Item 5.  Market  For  Common  Equity And Related Stockholder Matters. . . . .  6

Item 6.  Management's Discussion And Analysis Of Financial Condition,
Changes In Financial Condition And  Results Of Operations . . . . . . . . . .  7

Item 7.  Financial  Statements. . . . . . . . . . . . . . . . . . . . . . . .  9

Item 8. Changes And Disagreements With Accountants On Accounting And
Financial  Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Item 8A. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . 10

Item 8B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . .  10
                                    PART III

Item 9. Directors, Executive Officers, Promoters And Control Persons;
Compliance With Section 16(A) Of The Exchange Act . . . . . . . . . . . . . . 11

Item 10.  Executive  Compensation . . . . . . . . . . . . . . . . . . . . . . 11

Item 11. Security Ownership Of Certain Beneficial Owners And Management . . . 12

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

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

Item 14.  Principal Accountant Fees and Services. . . . . . . . . . . . . . . 13

                 [This Space Has Been Intentionally Left Blank]


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                                     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.

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"), according to which 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 Yair Reisner of the Department of Immunology of the
Weizmann Institute of Science.

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 Research and Development Company Limited ("Yeda"), which is
located in Rehovot, Israel, 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. 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.

For the year ended July 31, 2004, we did not generate revenues and generated net
losses of $22,529,000 as compared to no revenue and net losses in the amount of
$31,000 for the year ended July 31, 2003.

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

The Research Agreement entered into with Yeda provides the Company with the
right to market and sell products for solid organ transplantation from embryonic
tissue based on research conducted in the laboratory of Prof. Yair Reisner at
the Weizmann Institute of Science. Yeda is the commercial arm of the Weizmann
Institute of Science. Further, the 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. Yair 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.
Yair 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.


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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.


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<PAGE>

On October 8, 2003, we entered into a Research and License Agreement (the
"Research Agreement") with Yeda Research and Development Company Limited located
in Rehovot, Israel. 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 Yair 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
thee 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.
Finally, since the Company and Yeda did not come to an agreement regarding the
number of shares of common stock issuable upon exercise of the warrants, Yeda is
entitled to terminate the Research Agreement. Based on the parties' ongoing
negotiations, management is of the opinion that the parties will come to an
agreement, and Yeda will not terminate the license.

As part of the Research and License Agreement, the Company agreed to issue to
Yeda, by 120 days from the date of signature thereof, but which date Yeda
subsequently agreed to defer to no later than May 21, 2004, 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 2,315,139
and 2,771,937, 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. We have applied to Yeda not to take into
account certain adjustment events in determining such maximum number of shares
as well as for a deferral of the date by which we are obligated to issue Yeda
the warrants. We are waiting for a formal response from Yeda regarding this
issue. 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     ten years after the date of signature of the Research and License
            Agreement and to have such further terms and conditions as shall be
            satisfactory to us and Yeda.

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 owe an amount of US
            $900,000 of which we have paid $225,000 on April 23, 2004 and
            $225,000 on July 8, 2004; and

      o     with regard to the third year of the research period, we will pay an
            amount which shall be not less than US $900,000 and not more than US
            $1,000,000 per year to be determined by mutual agreement of the
            parties no later than 30 days prior to the commencement of the
            relevant year, in four equal three monthly non-refundable
            installments, payable in advance at the beginning of each three
            month period during such year.


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If the parties fail to reach agreement within the time frame referred to above
regarding the amount of the research budget payable for the third year of the
research period (as the case may be), then the research budget for such year
shall be US $900,000 and Yeda shall procure the performance of research for such
reduced amount.

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. We are waiting for a formal response from Yeda
regarding this issue. 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.

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 recently 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. We are
currently managed by Amos Eiran and Alex Werber our CEO and CFO, respectively.
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 Galei Haplada 11, Third entrance, 3rd 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.


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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:

      o     On July 19, 2004, an investor which participated in the Company's
            private placement of securities in March 2004, sent a letter to the
            Company 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 which participated in the
            Company's private placement of securities in March 2004, sent a
            letter to the Company claiming that it was prepared to bring claims
            in the United States District Court for the Southern District of New
            York if compromise negotiations were not commenced and concluded
            without delay. The Company has commenced compromise negotiations
            with all of the investors from the March 2004 private placement; and

      o     On October 4, 2004, the Company received a demand letter to execute
            an oral lease agreement of the Company's previous premises. Based on
            the opinion of the management and its legal advisors, the Company
            has reasonably good defense, and as a result, no provision was
            recorded in the financial statements; and

      o     The Company received a demand from a broker in relation to the
            Company's capital raising to receive $30,000 as a fee. The Company's
            management and its legal advisors, are of the opinion that the
            Company has good defense, and, as a result, no provision was
            recorded in the financial statements.

      o     On September 7, 2004, certain shareholders demanded from the former
            CEO to repay the Company the amount of $ 1,074,00 (which is the
            value of the shares, that the Company issued as a result of the
            CEO's cashless exercise of the abovementioned options, at the date
            of exercise, and which were sold by the CEO), claiming that the
            exercise of the options was executed before the end of the vesting
            period. In addition, the above shareholders demanded that the former
            CEO pay the company, compensation in the amount of $ 645,000 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 the Company. The Company denies assertions that
            may imply to its responsibility and, as a result, no provision was
            recorded in the financial statements.

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

During the forth quarter ended 2004, the Company did not submit any matters to a
vote of security holders through the solicitation of proxies or otherwise.


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                                     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 2003 and 2004. 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
---------------------------------------------------------------
2003             First               $   1.42          $   0.67
2003             Second              $   1.34          $   1.25
2003             Third               $   1.25          $   1.25
2003             Fourth              $   1.25          $   0.98
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
---------------------------------------------------------------

*Up to December 3, 2004.

B) HOLDERS

As of December 3, 2004, there were approximately 66 shareholders of record
holding a total of 27,582,114 shares of common stock. The holders of the 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

To obtain funding for our ongoing operations, pursuant to various offerings
conducted under Rule 506 of Regulation D, as promulgated under the Securities
Act of 1933, we sold units to accredited investors in private offerings. In
connection therewith, we sold 1,767,200 units at a price of $1.25 per unit with
each unit containing one share of common stock and three common stock purchase
warrants. The exercise prices are $3.75, $4.50 and $6.00 per warrant and are
exercisable for varying periods of six months, two years and three years from
the final closing of the offering. We raised an aggregate of $2,182,000 in
connection with this offering and we issued warrants to purchase an aggregate of
172,480 shares of common stock with an exercise price $.01 per share to nine
consultants of the Company. We closed an additional private offering on March
18, 2004, in which we received gross proceeds in the amount of $5,500,000 in
connection with the sale of 3,142,857 units at a price per unit of $1.75. Each
unit consists of one share of common stock and three common stock purchase
warrants. The three common stock purchase warrants included in each are each
exercisable at varying prices into one share of common stock at the holder's
option. Holder, in certain circumstances we may call each warrant. The exercise
prices are $3.75, $4.50 and $6.00 per warrant. The warrants are exercisable for
varying periods of six months from the effective date of the prospectus, two
years from closing of the offering and three years from closing of the offering.

The Company issued an aggregate of 2,777,000 shares of common stock to six
consultants of the Company that have provided various services to the Company.

In February 2004, we issued warrants to Robert G. Pico and Meir Segev, two of
our directors, to purchase 270,540 warrants each. Such warrants are exercisable
at $1.00 per share. In the event that either of the directors is removed from
office, the warrants shall immediately vest and shall be exercisable for a
period of one year from removal.


                                       8
<PAGE>

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
Shaked, Sir Roy York Calne and Prof Sutherland. The vesting period is three
years and the expiration date is March 29, 2009 for Prof. Shaked, April 2, 2009
for Sir Roy York Calne and November 2, 2009 for Prof. Sutherland.

In March 2004, the Board of Directors authorized the issuance of 280,000 shares
of common stock to Pinny Rabenou. Mr. Rabenou is the brother of Dr. Vicki
Rabenou, our former CEO and a former director. 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. As no employment agreement was
entered into, the Board of Directors cancelled the warrants issued to Mr.
Rabenou.

The former CEO was granted a warrant to purchase a total of 2,267,046 shares of
common stock, out of which 270,000 warrants were exercised into 249,859 shares
of common stock on a cashless basis. In November 2004, the Company's Board of
Directors evaluated the number of shares that are exercisable upon issuance of
the warrant and determined that the initial calculation of 2,267,046 was
incorrect. As a result, the Board of Directors applied the correct calculation
and has advised Dr. Rabenou that the warrant is only exercisable into 2,042,551
shares of common stock. The number of warrants and related compensation recorded
is based on the revised calculation. The amended calculation is based on a
formula determined in Dr. Rabenou's employment agreement, excluding the effect
of warrants that have not been yet issued to Yeda. The number of options and
related compensation recorded in the financial statements included in this
annual report are based on the revised calculation.

The Company granted Mr. Eiran, its Acting CEO and Chairman of the Board,
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.

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.

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
Research and Development Company Limited, which is located in Rehovot, Israel,
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. 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.


                                       9
<PAGE>

RESEARCH AGREEMENT

On October 8, 2003, we entered into a Research and License Agreement with Yeda
Research and Development Company Limited located in Rehovot, Israel. 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 Yair 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
thee 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.
Finally, since the Company and Yeda did not come to an agreement regarding the
number of shares of common stock issuable upon exercise of the warrants, Yeda is
entitled to terminate the Research Agreement. Based on the parties' ongoing
negotiations, management is of the opinion that the parties will come to an
agreement, and Yeda will not terminate the license.

As part of the Research and License Agreement, we agreed to issue to Yeda by 120
days from the date of signature thereof, but which date Yeda subsequently agreed
to defer to no later than May 21, 2004, 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 2,315,139
and 2,771,937, 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. We have applied to Yeda not to take into
account certain adjustment events in determining such maximum number of shares
as well as for a deferral of the date by which we are obligated to issue Yeda
the warrants. We are waiting for a formal response from Yeda regarding this
issue. 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     ten years after the date of signature of the Research and License
            Agreement and to have such further terms and conditions as shall be
            satisfactory to us and Yeda.

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 owe an amount of US
            $900,000 of which we have paid $225,000 on April 23, 2004 and
            $225,000 on July 8, 2004; and

      o     with regard to the third year of the research period, we will pay an
            amount which shall be not less than US $900,000 and not more than US
            $1,000,000 per year to be determined by mutual agreement of the
            parties no later than 30 days prior to the commencement of the
            relevant year, in four equal three monthly non-refundable
            installments, payable in advance at the beginning of each three
            month period during such year.


                                       10
<PAGE>

If the parties fail to reach agreement within the time frame referred to above
regarding the amount of the research budget payable for the third year of the
research period (as the case may be), then the research budget for such year
shall be US $900,000 and Yeda shall procure the performance of research for such
reduced amount.

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. We are waiting for a formal response from Yeda
regarding this issue. 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, 2004 COMPARED TO THE FISCAL
YEAR ENDED JULY 31, 2003

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, 2004
amounted to $22,519,000 compared to none for the year ended July 31, 2003. These
expenses reflect the commencement of our development stage operations. The
research and development expenses amounted to $13,039,000. The most significant
research and development expense amounted to $10,774,000 was attributable to the
warrant granted to Yeda, Professor Yair Reisner of the Department of Immunology
and his fellow scientists Dr. Dekel and Dr. Passwel and the Company employees.
Research and development activities resulted from the Company agreement with
Yeda amounted to $1,196,000.

We had general and administrative expenses totaling $9,482,000. The general and
administrative expenses were attributed mainly to costs related to warrants and
shares granted to service providers for services associated with the company
activities amounted to $7,681,000 and to warrants and shares granted to
employees and directors amounted to $665,000. The rest refers mainly to
salaries, legal expenses, audit expenses and directors and officers insurance.

We did not have operating expenses from continuing operations for the year ended
July 31, 2003.

(LOSS) FROM DISCONTINUED OPERATIONS OF A SEGMENT OF A BUSINESS

As a result of the discontinuance of our activities related to selling a bit
error rate tester, used for the integrity and reliability of communication
channels, we had a Loss of $31,000 in the year ending July 31, 2003, and a Loss
of $13,000 for the year ending July 31, 2004.

NET LOSS BEFORE TAXES ON INCOME

As a result of the above activities, we incurred a net loss of $22,542,000 for
the year ending July 31, 2004, as compared to a net loss of $31,000 in the year
ending July 31, 2003.

TAXES ON INCOME

The Company has a tax expense amounting to $23,000 resulting from tax liability
of its subsidiary resulting from an agreement between the Company and its
subsidiary to which the subsidiary will provide research, development and other
services to the Company. The Company will reimburse it for expenses on a cost
plus 10% basis.

NET LOSS

As a result of the above activities, we incurred a net loss of $22,529,000 for
the year ended July 31, 2004. as compared to a net loss of $31,000 for the year
ended July 31, 2003.


                                       11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents from continuing operations were $4,656,000 as of
July 31, 2004, compared to $5,000 as of July 31, 2003. This increase is
attributed to funds received from private placements that we conducted (see note
9 of the financial statement). We had a working capital from continuing
operations of $4,369,000 as of July 31, 2004, compared to negative working
capital of $10,000 as of July 31, 2003. We plan to continue to finance our
operations through a combination of private placements from our securities,
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.

SIGNIFICANT TRANSACTIONS AND EVENTS (Q4)

Mr. Yaron Sagi a former employee of the Company was granted warrants to purchase
33,333 shares of common stock at $.30 per share. All warrants were vested. Mr.
Yaron Sagi is a shareholder of the Company.

On September 7, 2004 the Board of Directors of the Company appointed Amos Eiran
as the Chairman of the Board and as the Acting Chief Executive Officer. In
consideration for acting as a Board member and as the Acting Chief Executive
Officer, he will receive a monthly fee of $15,000. In the event that Mr. Eiran
shall resign as Acting CEO after a suitable replacement has been appointed, then
he will receive $10,000 per month for serving as the Chairman of the Board. The
Company will reimburse Mr. Eiran reasonable travel and other expenses incurred
by him in connection with the performance of his executive duties. Mr. Eiran is
also entitled to receive fully paid sick leave pursuant to Sick Pay law
5736-1976 in Israel and a recreation payment according to applicable law in
Israel, but not less than 10 recreation days a year. 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.
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.

On September 7, 2004, at a special meeting of the Board of Directors of Company,
a majority of the directors of the Company elected to terminate Dr. Vicki
Rabenou as the Chief Executive Officer of the Company. According to her
employment agreement, the former CEO shall be entitled to payments totaling
approximately $78,000, which will be recorded in the first and the second
quarters of 2005. The Company has received a letter from Dr. Rabenou requesting
the payment of $150,000 to her. In addition, on September 7, 2004, the board of
directors appointed Amos Eiran as the Chairman of the Board and as the Acting
Chief Executive Officer. In addition Dr. Vicki 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. 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 Board of Directors decided to cancel a former bonus
granted to the former CEO in March 2004, in the amount of $110,000. The Company
has submitted a letter to the former CEO demanding that the bonus be repaid. The
former CEO has not responded.

The former CEO was granted 2,267,046 options to purchase a total of 2,267,046
Common shares, out of which 270,000 options were exercised into 249,859 Common
shares on a cashless basis. In November 2004, the Company's Board of Directors
decided to amend the number of options granted to the former CEO to 2,042,551
options to purchase a total of 2,042,551 common shares, due to incorrect
calculations.

On September 7, 2004, certain shareholders demanded from the former CEO to repay
the Company the amount of $ 1,074,00 (which is the value of the shares, that the
Company issued as a result of the CEO's cashless exercise of the abovementioned
options, at the date of exercise, and which were sold by the CEO), claiming that
the exercise of the options was executed before the end of the vesting period.
In addition, the above shareholders demanded that the former CEO pay the
company, compensation in the amount of $ 645,000 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 the Company. The Company denies
assertions that may imply to its responsibility and, as a result, no provision
was recorded in the financial statements.

On November 4, 2004, the Company's Board of Directors decided to demand from the
former CEO to repay the Company the amount of withholding tax to be paid to the
Israeli Tax Authorities, in respect of the exercise of her options, totaling
$538,000.

The former CEO's brother, was granted 280,000 common shares of the Company. In
March 2004, the board granted him 280,000 warrants to purchase 280,000 common
shares upon 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.

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


                                       12
<PAGE>

On September 30, 2004, attorneys of an investor which participated in the
Company's private placement of securities in March 2004, sent a letter to the
Company claiming, among other things, that the investor was a victim of the
Company's misconduct. The investor stated it was prepared to bring claims in the
United States District Court for the Southern District of New York if compromise
negotiations were not commenced and concluded without delay. The Company has
advised that it has commenced compromise negotiations with all of the investors
from the March 2004 private placement. Since the negotiations are in preliminary
stage, the company can not estimate at this stage the outcome of such
compromise.

On October 4, 2004, the Company received a demand letter to execute an oral
lease agreement of the Company's previous premises. Based on the opinion of the
management and its legal advisors, the company has reasonably good defense, and
a result, no provision was recorded in the financial statements.

The Company received a demand from a broker in relation to the Company's capital
raising to receive $30,000 as a fee. The Company's management and its legal
advisors, are of the opinion that the company has good defense, and as a result
no provision was recorded in the financial statements.

Due to the above events, some of which occurred during the quarter ended April
30, 2004 and certain other issues, the Company will be required to restate its
financial statements for the quarter ended April 30, 2004. The Company intends
to file an amendment to its Form 10-QSB for the quarter ended April 30, 2004.

ITEM 7. FINANCIAL STATEMENTS

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


                                       13
<PAGE>

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

On January 12, 2004, the Company engaged Ernst & Young LLP ("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 and 2002 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 and 2002 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, our company conducted an
evaluation, under the supervision and with the participation of our acting chief
executive officer and chief financial officer, of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and of the Exchange Act). Based upon
this evaluation, our acting chief executive officer and chief financial officer
concluded that there were material weaknesses with our disclosure controls and
procedures in so far as they were not effective in gathering, analyzing and
disclosing information needed to satisfy our disclosure obligations under the
Exchange Act.

As a result of the above, the Company reorganized its executive personnel to
address these issues. In connection with the reorganization, the Company is
developing procedures, forms, checklists and reporting packages to address these
deficiencies, and management believes progress had been made to improve the
Company's system of internal controls. However, despite management efforts there
continues to exist material weaknesses in the Company's internal controls.
Management believes additional progress in strengthening its internal controls
will continue through the end of the second quarter of 2005.

ITEM 8B. OTHER INFORMATION

None.


                                       14
<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
Robert G. Pico         59          Director
Uri  Elmaleh           57          VP Research
Meir Segev             51          Director
Peretz Shmuel          63          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.

Mr. 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.


                                       15
<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 2004. 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, 2004, 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 2002, 2003 and
2004 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.

                                  SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                        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 2004  179,000  110,000***   --         --        2,042,551     --       868,492****
              2003       --       --      --         --               --     --            --
              2002       --       --      --         --               --     --            --

Lance         2004       --       --      --         --               --     --            --
Rudelsheim    2003       --       --      --         --               --     --       $12,000*
              2002       --       --      --         --               --     --       $12,000*
</TABLE>

* This is a non cash item and accounted for as donated capital in the financial
statements
** Mr. Rudelsheim resigned as President, Secretary and Director on September 18,
2003.
*** On November 4, 2004, the Board of Directors decided to cancel a former bonus
granted to the former CEO in March 2004, in the amount of $110,000. The Company
has submitted a letter to the former CEO demanding that the bonus be repaid. The
former CEO has not responded.
***** Represents value of the options granted to Dr. Rabenou.

COMPENSATION OF DIRECTORS

Mr. Pico and Mr. Segev received warrants to purchase 250,540 shares of common
stock each at an exercise price of $1.00.

Directors who are not employees of the Company are paid $750 for participation
in Board meeting and $375 for telephonic attendance as well as annual fee of
$8,400.

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 December 3, 2004, 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.


                                       16
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                      Name and Address of
  Title of Class      Beneficial Owner               Amount of Shares(2)    Percent of Class(2)
------------------------------------------------------------------------------------------------
<S>                   <C>                                 <C>                     <C>
Common Stock          Robert G. Pico**                    67,325(3)               *%
                      3 Field Drive
                      Woodbridge, CT 06525
------------------------------------------------------------------------------------------------
Common Stock          Alex Werber**                       27,777(4)               *%
                      Galgaley Haplada 11
                      Third entrance
                      3rd floor
                      Herzlia 46733
                      Israel
------------------------------------------------------------------------------------------------
Common Stock          Amos Eiran**                       312,500(1)               *%
                      Galgaley Haplada 11
                      Third entrance
                      3rd floor
                      Herzlia 46733
                      Israel
------------------------------------------------------------------------------------------------
Common Stock          Meir Segev**                        67,325(3)               *%
                      Galgaley Haplada 11
                      Third entrance
                      3rd floor
                      Herzlia 46733
                      Israel
------------------------------------------------------------------------------------------------
Common Stock          Peretz Shmuel**                             0                 *%
                      Galgaley Haplada 11
                      Third entrance
                      3rd floor
                      Herzlia 46733
                      Israel
------------------------------------------------------------------------------------------------
Common Stock          Uri  Elmaleh **                      54,444                 *%
                      Galgaley Haplada 11
                      Third entrance
                      3rd floor
                      Herzlia 46733
                      Israel

------------------------------------------------------------------------------------------------
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 as a     529,281               1.90%
                      Group
------------------------------------------------------------------------------------------------
</TABLE>

* Less than 1% of the outstanding common stock.
** Executive officer and/or director.


                                       17
<PAGE>

(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 312,500 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 December 3, 2004. 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
December 3, 2004, we had 27,582,114 shares of common stock outstanding.

(3) Received a warrant to purchase 270,540 shares of common stock, of which
105,210 are vested for Mr. Pico and 67,235 are vested for Meir Segev.

(4) We granted a warrant to purchase 100,000 shares of common stock to Mr.
Werber. Currently, 33,333 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.

Meir Segev and 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. In the event that either of the directors are removed, the warrant shall
vest and shall be exercisable for a period of one year.

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 vest and become exercisable, but in any case not
later than six (6) months after termination of the reporting person's
employment. In the event that Mr. Werber is terminated, the warrant shall vest
and shall be exercisable for a period of one year. We have signed a letter
agreement with Alex Werber which provides that we must pay Mr. Werber 15,000
shekels per month while part time and 30,000 for full time.

We have entered into an employment agreement with Dr. Uri Elmaleh, our V.P. 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. Uri 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 Pinny Rabenou. Mr. Rabenou is the brother of Dr. Vicki
Rabenou, our former CEO and a former director. 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. 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. Vicki 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 the former
CEO in March 2004, in the amount of $110,000 and demand the bonus to be repaid.
The Company has submitted a letter to the former CEO demanding that the bonus be
repaid. The former CEO has not responded.


                                       18
<PAGE>

At a special meeting of the Board of Directors of the Company, a majority of the
directors of the Company elected to terminate Dr. Vicki Rabenou as the Chief
Executive Officer of the Company. In addition, Dr. Vicki 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 Shaked
and Sir Roy York Calne.

The Company granted Mr. Eiran, its Acting CEO and Chairman of the Board,
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.


                                       19
<PAGE>

ITEM 13. EXHIBITS

<TABLE>
<CAPTION>
Exhibit   Page  Description
No.       No.
-------------------------------------------------------------------------------------------------
<S>       <C>   <C>
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.
-------------------------------------------------------------------------------------------------
10.6            Employment Agreement entered with Amos Eiran
-------------------------------------------------------------------------------------------------

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
</TABLE>

*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.


                                       20
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

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, 2004 and 2003 and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-QSB during
that fiscal year were $79,000, and $4,000, 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,
2004 and 2003.

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, 2003.

For the fiscal year ended July 31, 2004. $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.


                                       21
<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 15th day of December 2004.

                                  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        December 15, 2004
                         Officer and Chairman of
                         the Board of Directors

/s/ Alex Werber          Chief Financial               December 15, 2004
                         Officer

/s/ Robert G. Pico       Director                      December 15, 2004

/s/ Meir Segev           Director                      December 15, 2004

/s/ Peretz Shmuel        Director                      December 15, 2004


                                       22
<PAGE>

                         TISSERA INC. AND ITS SUBSIDIARY

                           (FORMERLY: BERT LOGIC INC.)
                           A DEVELOPMENT STAGE COMPANY

                        CONSOLIDATED FINANCIAL STATEMENTS

                               AS OF JULY 31, 2004

                                 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

                              - - - - - - - - - - -

<PAGE>

[LOGO] Ernst & Young

             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 sheet of Tissera
Inc. (Formerly: Bert Logic Inc.) ("the Company") (a development stage company)
and its subsidiary as of July 31, 2004 and the related consolidated statement of
operations, statement of changes in shareholders' equity and the consolidated
statement of cash flows for the year then ended and for the period from May 31,
2000 (inception) through July 31, 2004. 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 audit. 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 shareholders' equity and cash
flows for the period from May 31, 2000 (inception) through July 31, 2004,
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 audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit and report of the other auditors provide a reasonable basis for our
opinion.

      In our opinion, based on our audit 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, 2004, and the consolidated results of their operations
and cash flows for the year then ended and for the period from May 31, 2000
(inception) through July 31, 2004, in conformity with accounting principles
generally accepted in the United States.

      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 faces a possible termination of key technology license and
experiencing adverse legal proceedings. 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 effect
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
August 31, 2004                                 A Member of Ernst & Young Global


                                     - 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)

<TABLE>
<CAPTION>
                                                                                              JULY 31,
                                                                                       --------------------
                                                                                         2004        2003
                                                                                       --------    --------
<S>                                                                                    <C>         <C>
    ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                           $  4,656    $     --
   Accounts receivable (Note 4)                                                             237          --
   Assets attributed to discontinued operations                                              --           8
                                                                                       --------    --------

Total current assets                                                                      4,893          --
                                                                                       --------    --------

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

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

                                                                                             --           8
                                                                                       --------    --------

Total assets                                                                           $  4,939    $      8
                                                                                       ========    ========

    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
   Trade payables                                                                      $     21    $     --
   Other accounts payable and accrued expenses (Note 6)                                     503          --
   Liabilities attributed to discontinued operations                                         --          18
                                                                                       --------    --------

Total current liabilities                                                                   524          18
                                                                                       --------    --------

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

COMMITMENTS AND CONTINGENCIES  (Note 7)

Total liabilities                                                                           536          18
                                                                                       --------    --------

STOCKHOLDERS' EQUITY (DEFICIENCY):
   Share capital (Note 9):
   Common stock of $ 0.0001 par value each -
      Authorized: 100,000,000 shares as of July 31, 2004 and 2003; Issued and
         outstanding: 27,556,914 and 18,036,000 shares as of July 31, 2004 and 2003,
         respectively                                                                         3           2
        Preferred stock of $ 0.0001 par value each -
      Authorized: 20,000,000 shares as of July 31, 2004 and 2003; Issued and
         outstanding: 0 shares as of July 31, 2004 and 2003                                  --          --
   Additional paid-in capital                                                            27,197          93
   Deferred stock based compensation                                                       (163)         --
   Deficit accumulated during the development stage                                     (22,634)       (105)
                                                                                       --------    --------

Total stockholders' equity (deficiency)                                                   4,403         (10)
                                                                                       --------    --------

Total liabilities and stockholders' equity (deficiency)                                $  4,939    $      8
                                                                                       ========    ========
</TABLE>

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


                                     - 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
                                                                                                     (INCEPTION
                                                                          YEAR ENDED JULY 31,       DATE) THROUGH
                                                                    ----------------------------       JULY 31,
                                                                        2004            2003            2004
                                                                    ------------    ------------    ------------
<S>                                                                 <C>             <C>             <C>
Operating expenses:
  Research and development (including cost related to options and
     warrants granted to employees and to others at the amount of
     $ 11,579 and $ 0 in 2004 and 2003, respectively)               $     13,039    $         --    $     13,039

  General and administrative (including cost related to warrants,
     options and shares granted to service providers, employees
     and directors at the amount of $ 8,346 and $ 0 in 2004 and
     2003, respectively)                                                   9,482              --           9,482
                                                                    ------------    ------------    ------------

                                                                          22,521              --          22,521
Financial income, net (Note 11)                                                2              --               2
                                                                    ------------    ------------    ------------

Loss from continuing operations                                           22,519              --          22,519
Income taxes (Note 8)                                                         23              --              23
                                                                    ------------    ------------    ------------

Loss from continuing operations                                           22,542              --          22,542

Loss (income) from discontinued operations (Note 1b)                         (13)             31              92
                                                                    ------------    ------------    ------------
                                                                    ------------    ------------    ------------

Net loss                                                            $     22,529    $         31    $     22,634
                                                                    ============    ============    ============

Basic and diluted net loss per share from continuing operations     $     (1.034)   $         --
                                                                    ============    ============

Basic and diluted net loss per share from discontinued operations   $         --    $     (0.001)
                                                                    ============    ============

Loss per share                                                      $     (1.034)   $     (0.001)
                                                                    ============    ============
Weighted average number of shares used in computing basic and
   diluted net loss per share:                                        21,787,629      18,036,000
                                                                    ============    ============
</TABLE>

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


                                     - 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      5
                                       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,
  2000x                              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,
  2001x                               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 issuance
  expenses                            1,767,200         *)--        2,033           --            --         2,033
Stock issued for cash related to
  PPM2,net of $ 517 issuance
  expenses                            3,142,858            1        4,983           --            --         4,984
Stock based compensation related
  to warrants granted  to service
  providers                                  --           --       11,429           --            --        11,429
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
                                     ==========   ==========   ==========   ==========    ==========    ==========
</TABLE>

*) Represents an amount lower than $ 1.

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


                                     - 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,
                                                                         2004        2003       2004
                                                                       --------    --------    --------
Cash flows from operating activities:
<S>                                                                    <C>         <C>         <C>
  Net loss                                                             $(22,529)   $    (31)   $(22,634)
  Adjustments required to reconcile net loss to net cash provided by
     (used in) operating activities:
  Depreciation                                                                3          --           3
  Expenses related to warrants granted to service providers              11,429          --      11,429
  Expenses related to options granted to employees and directors          1,130          --       1,130
  Expenses related to shares granted to service providers                 7,366       7,366
  Increase in accounts receivable                                          (237)         --        (237)
  Increase in trade payables                                                 21          --          21
  Increase in other accounts payable and accrued expenses                   503          --         503
  Increase in accrued severance pay, net                                      4          --           4
                                                                       --------    --------    --------

Net cash used in continuing operating activities                         (2,310)        (31)     (2,415)
Net cash provided by (used in) discontinued operating activities            (15)         36          75
                                                                       --------    --------    --------

Total net cash provided by (used in) operating activities                (2,325)          5      (2,340)
                                                                       --------    --------    --------

Cash flows from investing activities:
  Purchase of property and equipment                                        (41)         --         (41)
                                                                       --------    --------    --------

Net cash used in continuing investing activities                            (41)         --         (41)
Net cash used in discontinued investing activities                           --          --         (15)
                                                                       --------    --------    --------

Total net cash used in investing activities                                 (41)         --         (56)
                                                                       --------    --------    --------

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 (used in) discontinued financing activities             --          (7)         35
                                                                       --------    --------    --------

Total net cash provided by (used in) financing activities                 7,017          (7)      7,052
                                                                       --------    --------    --------

Increase (decrease) in cash and cash equivalents                          4,651          (2)      4,656
Cash and cash equivalents at beginning of period                              5           7          --
                                                                       --------    --------    --------

Cash and cash equivalents at end of period                             $  4,656    $      5    $  4,656
                                                                       ========    ========    ========
</TABLE>

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


                                     - 6 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO 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.

            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".

            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. As
            of December 15, 2004, Yeda is entitled to cancel 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.

            As a result of the termination of all activities related to the
            sales of Bit Error Rate Testers as mentioned above, the results of
            operations of these activities were reported separately as
            discontinued operations in the statements of operations for all
            periods presented. Assets and liabilities attributed to the
            discontinued operations have been reported separately in the balance
            sheet as of July 31, 2004. Breakdown of income (loss) from
            discontinued operations related to discontinued operation is as
            follows:


                                     - 7 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1:- GENERAL (CONT.)

                                                             YEAR ENDED JULY 31,
                                                             -------------------
                                                                2004   2003
                                                                ----   ----

            Revenues                                            $ --   $ 21
            Cost of revenues                                      --    (10)
            Selling, general and administrative expenses          --    (41)
            Financial expenses                                    --     (1)
            Extinguishment of debts and others                    13     --
                                                                ----   ----

            Gain (loss) attributed to discontinued operations   $ 13   $(31)
                                                                ====   ====

            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 will be
            engaged in research and development.

      c.    The Company's ability to continue to operate as a going concern is
            dependent on its ability to maintain its key technology license (see
            Note 2), a favorable outcome of the legal proceeding with investors
            (see Note 7(f), and 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 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 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 will lose its key technology license, will
            have unfavorable outcome of its legal proceeding with investors, or
            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. Accordingly, the Company will likely reduce general
            and administrative expenses and cease or delay development projects
            until it is able to obtain sufficient financing.

            In addition, if the Company will not be able to maintain its key
            technology license, the company's current research and development
            operations will cease.


                                     - 8 -
<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 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

            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 2,315,139 and 2,771,937, 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) 10 years after the date on which the agreement
            is signed. As of the balance sheet date, 1,419,862 of the Company's
            shares of the Common stock are underlying the warrants.

            Since the Company and Yeda did not come to an agreement regarding
            the terms of the warrants the warrants have not yet been issued. As
            a result, Yeda is entitled to terminate the agreement. Based on the
            parties' ongoing negotiations, management is of the opinion that the
            parties will come to an agreement, and that Yeda will not terminate
            the license.

            The Company had applied to Yeda for the deferral of the submission
            of its development program in accordance with the agreement, and has
            not yet received Yeda's response.

            As the license is used for research and development activities and
            since no alternative use exists for the license, the fair value of
            the warrants as of the balance sheet date, at the amount of $670,
            was recorded as research and development expenses. The fair value of
            the warrants was determined based on the number of share 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 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 will be
            re-measured at each reporting period based on the number of share
            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.


                                     - 9 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 2:- RESEARCH 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 to 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 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 months 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 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.

            The Company undertook to make its best effort 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.

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.    The Company's fiscal year ends on July 31 of each year.

            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.


                                     - 10 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

            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.

      c.    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.

      d.    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.

            Cash equivalents consist of money market funds.

      e.    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

      f.    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, 2004,
            no impairment losses have been identified.

      g.    Research and development costs:

            Research and development costs are charged to expenses as incurred.


                                     - 11 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

      h.    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 year ended July 31, 2004, were $ 12.

      i.    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.

      j.    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 2004: weighted
            average volatility of 129%, risk-free interest rates of 2.45%,
            dividend yields of 0% and a weighted-average expected life of the
            options of five years.


                                     - 12 -
<PAGE>


                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

            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,
                                                                              --------------------
                                                                               2004         2003
                                                                              --------    --------
<S>                                                                           <C>         <C>
            Net loss as reported                                              $ 22,529    $     31

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

            Pro forma net loss                                                $ 22,906    $     31
                                                                              ========    ========

            Pro forma net loss per share (basic and diluted)                  $  1.051    $     --
                                                                              ========    ========
</TABLE>

            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.

      k.    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, 2004, because all such securities have an anti-dilutive
            effect.


                                     - 13 -
<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 DATA)

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

            Such outstanding securities consist of the following:

                                                                      YEAR ENDED
                                                                       JULY 31,
                                                                         2004
                                                                      ----------
            Options                                                    2,648,217
            Warrants                                                  19,645,878
                                                                      ----------

            Total                                                     22,294,095
                                                                      ==========

      l.    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.

      m.    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.

      n.    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.


                                     - 14 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (CONT.)

      o.    Impact of recently issued accounting standards:

            In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
            Financing Instruments with Characteristics of Both Liabilities and
            Equity". This Statement established standards for the issuer as to
            how to classify both liabilities and equity. It requires that an
            issuer will classify a financial instrument that is within its scope
            as a liability (or an asset in some circumstances) because that
            financial instrument embodies an obligation of the issuer. This
            Statement is effective for financial instruments entered into or
            modified after May 31, 2003, and otherwise is effective at the
            beginning of the first interim period beginning after June 15, 2003,
            except for mandatory redeemable financial instruments of nonpublic
            entities. The adoption of this standard did not have an effect on
            the financial position or results of operations of the Company.

            In January 2003, the FASB issued FIN 46, "Consolidation of Variable
            Entities" ("FIN 46"). FIN 46 clarifies the application of Accounting
            Research Bulletin No. 51, "Consolidated Financial Statements" to
            those entities defined as "Variable Interest Entities" (more
            commonly referred to as special purpose entities) in which equity
            investors do not have the characteristics of a "controlling
            financial interest" or do not have sufficient equity at risk for the
            entity to finance its activities without additional subordinated
            financial support from other parties. FIN 46 applies immediately to
            all variable interest entities created after January 31, 2003 and by
            the beginning of the first interim or annual reporting period
            commencing after March 15, 2004 for variable interest entities
            created prior to February 1, 2003. The adoption of this Standard did
            not have an effect on the financial position or results of
            operations of the Company.

      p.    Reclassification:

            Amounts from prior years, that were classified as "Donated capital"
            in stockholders deficiency have been reclassified and subtotaled
            into additional paid-in capital. The reclassification has no effect
            on previously reported net loss, total stockholders' equity and cash
            flows.

NOTE 4:- ACCOUNTS RECEIVABLE

                                                             JULY 31,
                                                  ------------------------------
                                                       2004           2003
                                                  -------------   -------------
            Government authorities                $          16   $          --
            Prepaid expenses                                221              --
                                                  -------------   -------------
                                                  $         237   $          --
                                                  =============   =============


                                     - 15 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 5:- PROPERTY AND EQUIPMENT

                                                                JULY 31,
                                                           -------------------
                                                             2004       2003
                                                           --------   --------
            Cost:
              Office furniture and equipment               $      7   $     --
              Computer software and electronic equipment         28         --
              Leasehold improvements                              6         --
                                                           --------   --------
                                                           --------   --------

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

                                                                  3         --
                                                           --------   --------
                                                           --------   --------

            Depreciated cost                               $     38   $     --
                                                           ========   ========

            Depreciation expenses for the year ended July 31, 2004 were $ 3.
            *) Represents an amount lower than $ 1.

NOTE 6:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

            Government authorities           $         318   $          --
            Employees and payroll accruals              54              --
            Accrued expenses                           131              --
                                             -------------   -------------
                                             $         503   $          --
                                             =============   =============

NOTE 7:- COMMITMENTS AND CONTINGENCIES

      a.    The Company's subsidiary rents an office through October 1, 2005.
            Future rental payments under non-cancelable operating lease are as
            follows:

                                                                    U.S. DOLLARS
                                                                    IN THOUSANDS
                                                                    ------------

            First year                                                 $   19
            Second year                                                     3
                                                                       ------
                                                                       $   22
                                                                       ======

            Total rent expenses for the year ended July 31, 2004 were $ 10.

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


                                     - 16 -
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 7:- COMMITMENTS AND CONTINGENCIES (CONT.)

      c.    The Company received a demand from a broker for the payment of $30
            in respect of his services related to the Company's capital raising.
            The Company's management and its legal advisors are of the opinion
            that the Company has good defenses and, as a result, no provision
            was recorded in the financial statements.

      d.    (1) 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 shall be entitled to payments totaling
            approximately $ 78 upon termination of employment with the Company.
            According to a letter received in December 2004, the Former CEO is
            requesting the Company to pay approximately $ 150.

            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 demanded the Former CEO to repay the bonus. The
            bonus amount was recorded as account receivables, and was fully
            provided as a doubtful debt.

            (2)   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 these
            financial statements are based on the revised calculation.

            (3)   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 and
                  its legal advisors deny the assertions that may imply to the
                  Company's responsibility and as a result, no provision was
                  recorded in the financial statements.


                                      -17-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 7:- COMMITMENTS AND CONTINGENCIES (CONT.)

            (4)   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 Israeli tax authorities, in respect of
                  the exercise of options. Based on a preliminary discussion
                  with the Income Tax Authorities, the Company recorded a
                  liability in the amount of $ 269. Corresponding receivable
                  from the Former CEO totaling $ 269 was recorded, and fully
                  provided as a doubtful account.

      e.    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.

      f.    On July 19, 2004, the Company received a letter from an investor,
            which participated in the Company's private placement of securities
            in March 2004, claiming that the investor was a victim of the
            Company's misconduct. On September 30, 2004, another investor, which
            participated in the Company's private placement of securities in
            March 2004, sent a letter to the Company claiming, among others,
            that he was a victim of the Company's misconduct. The total
            investment in the Company's private placement from March 2004 was $
            5,500 (see Note 9c(1). The later investor stated it was prepared to
            bring claims in the United States District Court for the Southern
            District of New York if compromise negotiations were not commenced
            and concluded without delay. The Company has commenced compromise
            negotiations with all of the investors from the March 2004 private
            placement. Since the negotiations are in a preliminary stage, the
            Company cannot estimate at this stage the outcome of such compromise

      g.    On October 4, 2004, the Company received a demand letter to execute
            a lease agreement that was allegly agreed orally of the Company's
            previous premises. Based on the opinion of the management and its
            legal advisors, the Company has a reasonably good defense and, as
            such, no provision was recorded in the financial statements.


                                      -18-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO 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:

                                                                   JULY 31,
                                                              -----------------
                                                               2004        2003
                                                              -----       -----

            Operating loss carryforward                       $ 805       $  --
            Reserves and allowances                               7          --
                                                              -----       -----

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

            Net deferred tax asset                            $  --       $  --
                                                              =====       =====

            As of July 31, 2004, the Company has provided valuation allowances
            of $ 812 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, 2004, the Company have an accumulated tax loss
            carryforward of approximately $ 2,300. 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.    Income (loss) before taxes on income consists of the following:

                                                                     YEAR ENDED
                                                                      JULY 31,
                                                                        2004
                                                                      --------
            United States                                             $(22,584)
            Israel (*)                                                      65
                                                                      --------
                                                                      $(22,519)
                                                                      ========


                                      -19-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 8:- TAXES ON INCOME (CONT.)

      d.    Taxes on income included in the statement of operations:

                                                                  YEAR ENDED
                                                                   JULY 31,
                                                                     2004
                                                                  ----------

            Current taxes:
              Domestic                                            $      --
              Foreign (*)                                                23
                                                                  ---------
                                                                  $      23
                                                                  =========

      (*)   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.    The 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.


                                      -20-
<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 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.

            The 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.

      c.    Investment, 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.

                  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. The Company granted the investors 9,428,574
                  warrants with an exercise price at the 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. The
                  investors were granted certain registration rights. The
                  investors were also granted liquidation damages (as defined in
                  the investment agreement) at the rate of 1% of the invested
                  amount for each month in which a registration statement is not
                  maintained effective with the U.S. Securities and Exchange
                  Commission ("SEC"), during a period of 2 years.

                  In connection with the second PPM the Company granted to
                  certain brokers 172,480 warrants to purchase 172,480 shares of
                  Common stock at an exercise price of $ 0.01 per share. In
                  addition, the Company granted to these brokers 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, 2004, the brokers exercised 53,800
                  warrants into 53,800 shares of Common stock.


                                      -21-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 9:- STOCK CAPITAL (CONT.)

            Shares and warrants to service providers

            2.    During 2004, in addition to the warrants that were granted to
                  the brokers in respect of the PPM and the warrants that were
                  issued to Yeda (see Note 2), 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, 400,000
                  warrants to purchase 400,000 Common stock at an exercise price
                  of $ 1 per share and 2,777,000 shares of Common stock at no
                  consideration. 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. 3,190,984 warrants are fully vested
                  as of July 31, 2004 and 816,215 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, 2004, 1,177,477 warrants were exercised into 1,177,477
                  shares of Common stock.

            3.    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, 2004 are as
                  follows*:

<TABLE>
<CAPTION>
                     ISSUANCE DATE               NUMBER OF      EXERCISE       WARRANTS        EXERCISABLE
                                                 WARRANTS         PRICE       EXERCISABLE        THROUGH
             -------------------------------  -------------- -------------- -------------- ------------------
<S>                                               <C>          <C>            <C>            <C>
             January 2004                         1,669,815    $   0-0.01     1,669,815      January 2009
             February 2004                        1,899,680    $   3.75       1,899,680      August 2004 **)
             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                          118,680    $   0.01         118,680      February 2006
             March 2004                           3,142,858    $   3.75       3,142,858      March 2005
             March 2004                           3,142,858    $   4.5        3,142,858      March 2006
             March 2004                           3,142,858    $   6          3,142,858      March 2007
             March 2004                             493,692    $   0            493,692      March 2009
             March 2004                             416,215    $   0             57,807      March 2009
             March 2004                             200,000    $   1             22,222      March 2009
             April 2004                             200,000    $   1             22,222      April 2009
                                              --------------                --------------
                                                18,226,016                    17,512,052
                                               ==============                ==============
</TABLE>

            *)    This table does not include the warrants that the Company
                  committed to issue to Yeda (see Note 2).

            **)   These options were not exercised, and expired.


                                      -22-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 9:- STOCK CAPITAL (CONT.)

                  The fair value for the warrants to service providers was
                  estimated on the date of grant using Black-Scholes option
                  pricing model, with the following weighted-average assumptions
                  for 2004; weighted average volatility of 135%, risk-free
                  interest rates of 3.25% dividend yields of o% and a weighted
                  average expected life of the options of five years.

                  Shares and options to employees and to directors

            4.    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 such reporting period.
                  As of July 31, 2004, 67,635 options were exercised into 52,278
                  shares of Common stock on a cashless basis.

                  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 (see also Note 7d(2)). 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 Company's stock market price at such reporting
                  period. In addition, the Company granted to the former CEO's
                  brother 280,000 shares of Common stock at no consideration
                  (see also Note 7f).

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

                  As of July 31, 2004, 281,112 options were exercised into
                  260,211 shares of Common stock of the Company, on a cashless
                  basis.


                                      -23-
<PAGE>

NOTE 9:- STOCK CAPITAL (CONT.)

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

<TABLE>
<CAPTION>
                                                       JULY 31, 2004                   JULY 31, 2003
                                              ------------------------------------------------------------
                                                                  WEIGHTED
                                                                  AVERAGE                   WEIGHTED
                                                AMOUNT OF         EXERCISE      AMOUNT OF    AVERAGE
                                                 OPTIONS           PRICE         OPTIONS   EXERCISE PRICE
                                              --------------  --------------- ----------- ----------------
<S>                                            <C>             <C>            <C>              <C>
             Outstanding at the beginning
               of the year                            --       $      --             --        $     --

             Granted                           2,996,964       $   0.426             --        $     --
             Exercised                          (348,747)      $   0.435             --        $     --
                                               ---------                      ---------
             Outstanding at the end of the
               year                            2,648,217       $   0.425             --        $     --
                                               =========       =========      =========        ========
             Exercisable options at the end
               of the year                       372,141       $   0.342             --        $     --
                                               =========       =========      =========        ========
</TABLE>

            2.    The options outstanding as of July 31, 2004, have been
                  separated into ranges of exercise price, as follows:

<TABLE>
<CAPTION>
                                 OPTIONS OUTSTANDING      WEIGHTED AVERAGE          OPTIONS
                                        AS OF                REMAINING         EXERCISABLE AS OF
                EXERCISE              JULY 31,              CONTRACTUAL            JULY 31,
                  PRICE                 2004                    LIFE                 2004
           -------------------  ----------------------   ------------------- --------------------
                                                               YEARS
                                                         -------------------

<S>               <C>           <C>                             <C>           <C>
                  $   1                 473,445                 4.541                  22,545
                  $ 0.3               2,174,772                 4.653                 349,596
                                ---------------                               ---------------

                                      2,648,217                                       372,141
                                ===============                               ===============
</TABLE>

            3.    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:

<TABLE>
<CAPTION>
                                                                                JULY 31,
                                                                     -----------------------------
                                                                         2004            2003
                                                                     --------------  -------------

<S>                                                                    <C>             <C>
                  Weighted average exercise price                      $    0.425      $      -
                  Weighted average fair value on date of grant         $    0.797      $      -
</TABLE>

                  Compensation expenses recorded by the Company in respect of
                  its share-based employee compensation awards amounted to $
                  1,130 for the year ended July 31, 2004.


                                      -24-
<PAGE>

                                                 TISSERA INC. AND ITS SUBSIDIARY
                                                     (FORMERLY: BERT LOGIC INC.)
                                                   (A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 10:- TRANSACTIONS WITH RELATED PARTIES

      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 Note 7f.

      c.    As for options granted, see also Notes 7e and Note 9c(4).

      d.    Equipment purchased from a party related to the former CEO, amounted
            to $ 3.

<TABLE>
<CAPTION>
                                                                        YEAR ENDED JULY 31,
                                                                        -----------------
                                                                         2004      2003
                                                                        -------   -------
<S>                                                                     <C>       <C>
            Fees and related benefits and compensation expenses in      $   984   $    --
              respect of options granted to member of the Board of
              Directors
                                                                        =======   =======
            Salary and related benefits and compensation expenses in
              respect of options granted, to an employee who is a
              shareholder                                               $    96   $    --
                                                                        =======   =======
</TABLE>


NOTE 11:- FINANCIAL INCOME, NET

                                                        YEAR ENDED JULY 31,
                                                   -----------------------------
                                                        2004            2003
                                                   -------------   -------------
             Income:
               Interest income                     $          12   $          --
                                                   -------------   -------------
               Bank charges                                   10              --
                                                   -------------   -------------
                                                   $           2   $          --
                                                   =============   =============


NOTE 12:- SUBSEQUENT EVENTS

      a     As of August 31, 2004, 25,200 warrants were exercised into 25,200
            shares of Common stock by the Company's brokers at an exercise price
            of $ 0.01 per share.

      b.    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.


                                     - 25 -
<PAGE>

                         [LETTERHEAD OF MANNING ELLIOTT]

                          INDEPENDENT AUDITORS' REPORT

To the Stockholders
BERT Logic Inc.

We have audited the accompanying balance sheets of BERT Logic Inc. as of July
31, 2003 and 2002 and the related statements of operations, stockholders' equity
and cash flows for the years then ended. 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.

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

In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of BERT Logic Inc., as of July 31,
2003 and 2002, and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has suffered operating losses from inception and has a
working capital deficit. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ "Manning Elliott"

CHARTERED ACCOUNTANTS
Vancouver, Canada

September 16, 2003