UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

                                   (Mark One)

        |X| Quarterly report under Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the quarterly period ended June 30, 2006

       |_| Transition report under Section 13 or 15(d) of the Exchange Act

   For the transition period from _______________________ to ________________

                        Commission File Number 333-106160

                                  M-WISE, INC.

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

                    Delaware                               11-3536906
        (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)               Identification No.)

                 3 Sapir Street, Herzeliya Pituach, Israel 46852
                    (Address of principal executive offices)

                                 +972-9-9611212
                (Issuer's telephone number, including area code)

                             All Correspondence to:
                             Arthur S. Marcus, Esq.
                             Sanny J. Barkats, Esq.
                               Gersten Savage LLP
                         600 Lexington Avenue, 9th Floor
                            New York, New York 10022
                                 (212) 752-9700

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

                                                                Yes |X| No |_|

The number of shares outstanding of the issuer's common stock, as of August 14,
                             2006 was 128,902,659.

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


<PAGE>

                                  m-WISE, INC.

                                TABLE OF CONTENTS

                                                                            Page

PART I
FINANCIAL INFORMATION

Item 1.     Financial Statements
                  Unaudited Balance Sheet as of June30, 2006                   2
                  Unaudited Statements of Operations for the
                    Three Months Ended and Six Months Ended
                    June 30, 2006 and 2005                                     3
                  Unaudited Statements of Cash Flows for the Six Months
                    Ended June 30, 2006 and 2005                               5
                  Notes to Unaudited Financial Statements                      6
Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                         18
Item 3.     Controls and Procedures                                           22

PART II
OTHER INFORMATION

Item 1      Legal Proceedings                                                 23
Item 2      Changes in Securities and Small Business                          23
            Issuer Purchases of Equity Securities                             23
Item 3      Defaults upon Senior Securities                                   23
Item 4      Submission of Matters to a Vote of Security Holders               23
Item 5      Other Information                                                 23
Item 6      Exhibits and Reports on Form 8-K                                  23


                                       -2-
<PAGE>

PART I
FINANCIAL INFORMATION

Item  1. Financial Statements

                                  M-WISE, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                      PERIODS ENDED JUNE 30, 2006 AND 2005




                                    CONTENTS

Report of Independent Registered Public Accounting Firm                      1

Consolidated Balance Sheets                                                  2

Consolidated Statements of Operations                                    3 - 4

Consolidated Statements of Changes in Stockholders' Deficit                  5

Consolidated Statements of Cash Flows                                        6

Notes to Consolidated Financial Statements                              7 - 18

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of m-Wise, Inc.

      We have reviewed the accompanying  consolidated  balance sheets of m-Wise,
Inc. and  subsidiaries  (the  "Company")  as of June 30, 2006 and 2005,  and the
related consolidated  statements of operations,  stockholders'  deficit and cash
flows for the six months then ended. These interim financial  statements are the
responsibility of the Company's management.

      We  conducted  our  reviews in  accordance  with  standards  of the Public
Company  Accounting  Oversight  Board  (United  States).  A  review  of  interim
financial  information consists primarily of applying analytical  procedures and
making inquires of persons  responsible for financial and accounting matters. It
is  substantially  less in scope  than an audit  conducted  in  accordance  with
standards of the Public Company Accounting  Oversight Board (United States), the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

      Based on our reviews, we are not aware of any material  modifications that
should be made to the  consolidated  interim  financial  statements  referred to
above for them to be in conformity with accounting principles generally accepted
in the United States of America.

                                         "SF PARTNERSHIP, LLP"

Toronto, Canada                          CHARTERED ACCOUNTANTS
August 1, 2006


                                      -1-
<PAGE>

M-WISE, INC.
Balance Sheets
June 30, 2006 and 2005

<TABLE>
<CAPTION>
                                                              2006            2005
                                                          ------------    ------------
<S>                                                       <C>             <C>
                                     ASSETS

Current
   Cash                                                   $     68,536    $        481
   Accounts receivable - trade (net of allowance for
     doubtful accounts of $63,952, 2005, $25,177)              527,175         133,345
   Prepaid and sundry assets                                   272,555          15,980
                                                          ------------    ------------

                                                               868,266         149,806

Long-term Prepaid Expenses                                      23,162          10,195

Equipment (note 3)                                             140,104         196,401

Deferred Financing Fees                                         18,952          31,580
                                                          ------------    ------------

                                                          $  1,050,484    $    387,982
                                                          ============    ============

                                   LIABILITIES

Current

   Bank indebtedness                                      $        750    $      1,724
   Trade accounts payable                                      102,460          84,208
   Advances from shareholder (note 4)                          433,349          75,192
   Other payables and accrued liabilities                    1,008,583         947,381
   Billings in excess of costs on uncompleted contracts        150,763              --
   Notes payable - current portion                                  --         149,200
                                                          ------------    ------------

                                                             1,695,905       1,257,705

Accrued Severance Pay (note 5)                                  59,974          36,844

Notes Payable (note 6)                                              --       1,757,893
                                                          ------------    ------------

                                                             1,755,879       3,052,442
                                                          ------------    ------------

                            STOCKHOLDERS' DEFICIENCY

Capital Stock (note 7)                                         219,135         118,162

Paid in Capital                                              9,939,674       6,904,401

Accumulated Deficit                                        (10,864,204)     (9,687,023)
                                                          ------------    ------------

                                                              (705,395)     (2,664,460)
                                                          ------------    ------------

                                                          $  1,050,484    $    387,982
                                                          ============    ============
</TABLE>

   (The accompanying notes of the financial statements are an integral part of
                                these statements)


                                      -2-
<PAGE>

M-WISE, INC.
Consolidated Statements of Operations
Six Months Ended June 30, 2006 and 2005

<TABLE>
<CAPTION>
                                                                  2006             2005
                                                             -------------    -------------
<S>                                                          <C>              <C>

Sales                                                        $   1,024,700    $   1,623,782

Cost of Sales                                                      111,740          357,373
                                                             -------------    -------------

Gross Profit                                                       912,960        1,266,409
                                                             -------------    -------------

Expenses
   General and administrative                                      613,406          584,584
   Research and development                                        272,749          355,528
   Financial                                                       251,518           18,521
                                                             -------------    -------------

                                                                 1,137,673          958,633
                                                             -------------    -------------

Net (Loss) Earnings                                          $    (224,713)   $     307,776
                                                             =============    =============

Basic and Fully Diluted (Loss) Earnings Per Share (note 7)   $        0.00             0.00
                                                             =============    =============

Basic Weighted Average Number of Shares                        122,498,248       69,506,898
                                                             =============    =============
</TABLE>

   (The accompanying notes of the financial statements are an integral part of
                                these statements)


                                      -3-
<PAGE>

M-WISE, INC.
Consolidated Statements of Operations
Three Months Ended June 30, 2006 and 2005

<TABLE>
<CAPTION>
                                                                  2006           2005
                                                              ------------   ------------
<S>                                                           <C>            <C>

Sales                                                         $    770,917   $    359,233

Cost of Sales                                                       98,793         51,919
                                                              ------------   ------------

Gross Profit                                                       672,124        307,314
                                                              ------------   ------------

Expenses
   General and administrative                                      350,888        277,817
   Research and development                                        137,372        203,081
   Financial                                                        21,460          3,869
                                                              ------------   ------------

                                                                   509,720        484,767
                                                              ------------   ------------

Net Earnings (Loss)                                           $    162,404   $   (177,453)
                                                              ============   ============

Basic and Fully Diluted  Earnings (Loss) Per Share (note 7)   $       0.00           0.00
                                                              ============   ============

Basic Weighted Average Number of Shares                        128,066,495     69,506,898
                                                              ============   ============
</TABLE>

   (The accompanying notes of the financial statements are an integral part of
                                these statements)


                                      -4-
<PAGE>

m-Wise, Inc.
Consolidated Statements of Stockholders' Deficit
Six Months Ended June 30, 2006 and 2005

<TABLE>
<CAPTION>
                                             Common Shares
                                       ---------------------------    Additional
                                          Number                       Paid in       Accumulated
                                        of Shares        Amount        Capital         Deficit
                                       ------------   ------------   ------------    ------------
<S>                                    <C>            <C>            <C>             <C>

Balance, January 1, 2005                 69,506,898   $    118,162   $  6,894,664    $ (9,994,799)

Options vested for employee services             --             --          9,737              --

Net earnings                                     --             --             --         307,776
                                       ------------   ------------   ------------    ------------

Balance, June 30, 2005                   69,506,898   $    118,162   $  6,904,401    $ (9,687,023)
                                       ============   ============   ============    ============

Balance, January 1, 2006                113,514,158   $    192,974   $  7,399,394    $(10,639,491)

Issuance of common stock for
  repayment of the notes
  payable (notes 6 and 7)                12,400,448         21,081      1,723,829              --

Issuance of warrants for
  repayment of notes payable
  (notes 6 and 7)                                --             --        436,228              --

Exercise of stock options
  (note 7) - quarter ended
  March 31, 2006                            169,871            289            (18)             --

Issuance of commons stock for
  consulting fees (note 7) -
  quarter ended June 30, 2006             2,818,182          4,791        305,209              --

Options vested for employee
  services (note 7)                              --             --         75,032              --

Net loss                                         --             --             --        (224,713)
                                       ------------   ------------   ------------    ------------

Balance, June 30, 2006                  128,902,659   $    219,135   $  9,939,674    $(10,864,204)
                                       ============   ============   ============    ============
</TABLE>

   (The accompanying notes of the financial statements are an integral part of
                                these statements)


                                      -5-
<PAGE>

M-WISE, INC.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2006 and 2005

<TABLE>
<CAPTION>
                                                            2006           2005
                                                        -----------    -----------
<S>                                                     <C>            <C>
Cash Flows from Operating Activities
  Net (loss) earnings                                   $  (224,713)   $   307,776
  Adjustments required to reconcile net loss to net
    cash used in operating activities:
    Consulting fees paid by issuance of common shares        51,667             --
    Depreciation                                             54,640         57,122
    Wages and salaries paid by options                       75,303          9,737
    Financing fee paid by issuance of common shares         222,104             --
  Net Changes in Assets & Liabilities
    Accounts receivable - trade                            (374,141)        22,018
    Prepaid and sundry assets                                (3,323)        (8,972)
    Deferred revenue                                        136,963       (669,890)
    Trade accounts payable                                    7,556        (64,345)
    Other payables and accrued liabilities                   12,018        140,504
    Long-term prepaid expenses                                 (865)         4,400
    Deferred financing fees                                   6,314          6,314
    Accrued severance pay                                     1,503         20,327
                                                        -----------    -----------

                                                            (34,974)      (175,009)
                                                        -----------    -----------

Cash Flows from Investing Activities
  Acquisition of equipment                                  (28,829)       (32,744)
                                                        -----------    -----------

Cash Flows from Financing Activities
  Advances from shareholder                                 142,084         75,192
  Proceeds from issuance of promissory notes                     --         23,200
  Proceeds from issuance of common stock and warrants
    for repayment of notes payable                        1,959,034             --
  Repayment of notes payable                             (1,959,034)            --
  Bank indebtedness - net                                   (10,318)       (15,012)
                                                        -----------    -----------

                                                            131,766         83,380
                                                        -----------    -----------

Net Increase (Decrease) in Cash                              67,963       (124,373)

Cash - beginning of  period                                     573        124,854
                                                        -----------    -----------

Cash - end of period                                    $    68,536    $       481
                                                        ===========    ===========

Interest and Income Taxes Paid

During the period, the company had cash flows arising
  from income taxes and interests paid as follows:

  Interest paid                                         $     1,463    $       603
                                                        ===========    ===========

  Income taxes paid                                     $        --    $        --
                                                        ===========    ===========
</TABLE>

   (The accompanying notes of the financial statements are an integral part of
                                these statements)


                                      -6-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

1.    Description of Business and Going Concern

      a)    Description of Business

            m-Wise Inc. (the "Company") is a Delaware corporation which develops
            interactive  messaging  platforms for mobile phone-based  commercial
            applications,  transactions  and information  services with internet
            billing capabilities.

            The Company's  wholly-owned  subsidiary,  m-Wise Ltd., is located in
            Israel and was incorporated in 2000 under the laws of Israel.

      b)    Going Concern

            The Company's financial  statements are presented on a going concern
            basis, which contemplates the realization of assets and satisfaction
            of  liabilities  in the normal  course of business.  The Company has
            experienced  recurring  losses since inception and has negative cash
            flows from operations that raise substantial doubt as to its ability
            to continue as a going concern. For the quarter ended June 30, 2006,
            the Company experienced net losses of $224,713 and a working capital
            deficit of $827,639 (2005 - $1,107,899).

            The  Company is in an  industry  where  operational  fluctuation  is
            usually  higher than other  ordinary  industries.  The  accompanying
            financial  statements reflect management's current assessment of the
            impact to date of the economic  situation on the financial  position
            of  the  Company.   Actual  results  may  differ   materially   from
            management's current assessment.

            The  Company's  ability  to  continue  as a  going  concern  is also
            contingent  upon  its  ability  to  secure   additional   financing,
            continuing   sale  of  its   products  and   sustaining   profitable
            operations.

            The Company is  pursuing  additional  financing  but there can be no
            assurance  that the Company  will be able to secure  financing  when
            needed or obtain financing on terms satisfactory to the Company,  if
            at all.

            The financial  statements do not include any  adjustments to reflect
            the possible future effects on the recoverability and classification
            of assets or the amounts and  classification of liabilities that may
            result from the  possible  inability of the Company to continue as a
            going concern.


                                      -7-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

2.    Summary of Significant Accounting Policies

      The  accounting  policies  of the  Company  are in  accordance  with  U.S.
      generally accepted accounting  principles,  and their basis of application
      is consistent with that of the previous  period.  Outlined below are those
      policies considered particularly significant:

      a)    Reporting Currency

            A majority of the Company's  revenues are generated in U.S. dollars.
            In  addition,  a  substantial  portion  of the  Company's  costs are
            incurred in U.S.  dollars.  Management has determined  that the U.S.
            dollar  will be  used  as the  Company's  functional  and  reporting
            currency.

      b)    Basis of Consolidation

            The  consolidated  financial  statements  include the  operations of
            m-Wise Inc. and its wholly-owned subsidiary. Intercompany's balances
            and transactions have been eliminated.

      c)    Deferred Financing Fees

            Deferred financing fees relate to a non-interest bearing credit line
            facility of $500,000  provided by a shareholder as disclosed in note
            4. The overdraft from the credit  facility is  non-interest  bearing
            and there are no  covenants  with  which  the  Company  will need to
            comply.  The  credit  line  facility  has  no  expiration  date  and
            management  expects to retain the  facility for a period of at least
            five  years.  Accordingly,  the fees are being  amortized  using the
            straight line method over five years.

      d)    Equipment and Depreciation

            Equipment stated at cost less accumulated depreciation. Depreciation
            is based on the estimated useful lives of the assets and is provided
            using the undernoted annual rates and methods:

            Furniture and equipment       6-15%        Straight line
            Computer equipment              33%        Straight line
            Leasehold improvements     Straight line over the term of the lease


                                      -8-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

2.    Summary of Significant Accounting Policies (cont'd)

      e)    Revenue Recognition

            The  Company  generates  revenues  from  product  sales,  licensing,
            customer services and technical support.

            Revenues from products sales are recognized on a  completed-contract
            basis, in accordance with Staff Accounting Bulletin No. 101 "Revenue
            Recognition in Financial  Statements" ("SAB No. 101"),  Statement of
            Position  97-2  "Software  Revenue  Recognition"  and  Statement  of
            Position 81-1 "Accounting for Performance of  Construction-Type  and
            Certain  Production-Type   Contracts".  The  Company  has  primarily
            short-term contracts whereby revenues and costs in the aggregate for
            all  contracts  is expected to result in a matching of gross  profit
            with period  overhead or fixed costs similar to that achieved by use
            of  the  percentage-of-completion  method.  Accordingly,   financial
            position and results of operations  would not vary  materially  from
            those resulting from the use of the percentage-of-completion method.
            Revenue is  recognized  only after all three stages of  deliverables
            are complete;  installation,  approval of acceptance test results by
            the customer and when the product is successfully put into real-life
            application.   Customers   are  billed,   according  to   individual
            agreements,  a percentage of the total contract fee upon  completion
            of work in each stage; approximately 40% for installation,  40% upon
            approval of acceptance  tests by the customer and the balance of the
            total  contract  price when the  software is  successfully  put into
            real-life application. The revenues, less its' associated costs, are
            deferred and  recognized  on completion of the contract and customer
            acceptance.  Amounts  received for work  performed in each stage are
            not refundable.

            On-going  service and technical  support  contracts  are  negotiated
            separately at an additional  fee. The technical  support is separate
            from the  functionality of the products,  which can function without
            on-going support.

            Technology  license  revenues are recognized in accordance  with SAB
            No. 101 at the time the  technology  and license is delivered to the
            customer, collection is probable, the fee is fixed and determinable,
            a  persuasive  evidence  of  an  agreement  exists,  no  significant
            obligation  remains  under the sale or  licensing  agreement  and no
            significant customer acceptance requirements exist after delivery of
            the technology.

            Revenues  relating to customer  services and  technical  support are
            recognized  as the services are rendered  ratably over the period of
            the related contract.

            The Company does not sell products with multiple deliverables. It is
            management's  opinion that EITF 00-21,  "Revenue  Arrangements  With
            Multiple Deliverables" is not applicable.

      f)    Research and Development Costs

            Research and development costs are expensed as incurred.


                                      -9-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

2.    Summary of Significant Accounting Policies (cont'd)

      g)    Use of Estimates

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

      h)    Concentration of Credit Risk

            SFAS No. 105, "Disclosure of Information About Financial Instruments
            with   Off-Balance   Sheet  Risk  and  Financial   Instruments  with
            Concentration   of  Credit   Risk",   requires   disclosure  of  any
            significant  off-balance  sheet risk and credit risk  concentration.
            The  Company  does not have  significant  off-balance  sheet risk or
            credit   concentration.   The  Company   maintains   cash  and  cash
            equivalents with major Israel financial institutions.

            The Company's provides credit to its clients in the normal course of
            its  operations.  Depending  on their size,  financial  strength and
            reputation,  customers are given credit terms of up to 60 days.  The
            Company  carries out, on a continuing  basis,  credit  checks on its
            clients and maintains provisions for contingent credit losses which,
            once they materialize, are consistent with management's forecasts.

            For other debts, the Company determines,  on a continuing basis, the
            probable  losses and sets up a  provision  for  losses  based on the
            estimated realizable value.

            Concentration of credit risk arises when a group of clients having a
            similar  characteristic  such  that  their  ability  to  meet  their
            obligations  is  expected  to be  affected  similarly  by changes in
            economic  or  other  conditions.  The  Company  does  not  have  any
            significant risk with respect to a single client.

      i)    Fair Value of Financial Instruments

            The  estimated  fair  value  of  financial   instruments   has  been
            determined by the Company using  available  market  information  and
            valuation  methodologies.   Considerable  judgment  is  required  in
            estimating  fair  value.  Accordingly,  the  estimates  may  not  be
            indicative  of the amounts the  Company  could  realize in a current
            market exchange.  At June 30, 2006 and 2005, the carrying amounts of
            cash  equivalents,  short-term bank deposits,  trade receivables and
            trade payables  approximate  their fair values due to the short-term
            maturities of these instruments.


                                      -10-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

2.    Summary of Significant Accounting Policies (cont'd)

      j)    Earnings per Common Share

            The Company calculates net earnings per share based on SFAS No. 128,
            "Earnings  Per  Share".  Basic  earnings  per share is  computed  by
            dividing net earnings attributable to the common stockholders by the
            weighted average number of common shares outstanding.  Fully diluted
            earnings per share is computed  similar to basic  earnings per share
            except that the  denominator  is  increased to include the number of
            additional  common  shares that would have been  outstanding  if the
            potential common shares had been issued and if the additional common
            shares were dilutive.

      k)    Impact of Recently Issued Accounting Standards

            In  December  2004,  the FASB  issued a  revision  to SFAS No.  123,
            "Share-Based  Payment"  (Statement 123R). This Statement  requires a
            public entity to measure the cost of employee  services  received in
            exchange for an award of equity  instruments based on the grant-date
            fair value of the award (with limited exceptions). That cost will be
            recognized  over the period during which the employee is required to
            provide service in exchange for the award  requisite  service period
            (usually the vesting period). No compensation cost is recognized for
            equity  instruments  for which employees do not render the requisite
            service.   Employee   share   purchase  plans  will  not  result  in
            recognition  of  compensation  cost if certain  conditions  are met;
            those  conditions  are much the same as the  related  conditions  in
            Statement 123. This Statement is effective for public  entities that
            do not file as a small  business  issuers as of the beginning of the
            first interim or annual  reporting period that begins after June 15,
            2005.  This  Statement  applies  to all  awards  granted  after  the
            required  effective  date and to awards  modified,  repurchased,  or
            cancelled  after  that  date.  The  cumulative  effect of  initially
            applying  this  Statement,  if any, is recognized as of the required
            effective date and is not expected to have a material  impact on the
            Company's consolidated financial statements.

            In May 2005, the FASB issued Statement No. 154,  Accounting  Changes
            and Error Corrections - A Replacement of APB Opinion No. 20 and FASB
            Statement No. 3 (Statement  No. 154).  Statement No. 154 changes the
            requirements  for the  accounting  for and  reporting of a change in
            accounting  principle.  Statement  No.  154  requires  retrospective
            application of any change in accounting  principle to prior periods'
            financial  statements.  Statement No. 154 is effective for the first
            fiscal period  beginning  after  December 15, 2005. We do not expect
            the implementation of Statement No. 154 to have a significant impact
            on our consolidated financial statements.


                                      -11-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

3.    Equipment

      Equipment is comprised as follows:

<TABLE>
<CAPTION>
                                                   2006                      2005
                                           Accumulated               Accumulated
                                  Cost     Depreciation     Cost     Depreciation
                                --------   ------------   --------   ------------
<S>                             <C>        <C>            <C>        <C>

      Furniture and equipment     60,090         29,451     57,747         23,170

      Computer equipment        $396,856   $    287,845   $546,164   $    393,071

      Leasehold improvements      18,810         18,356     37,684         28,953
                                --------   ------------   --------   ------------

                                $475,756   $    335,652   $641,595   $    445,194
                                --------   ------------   --------   ------------

      Net carrying amount                  $    140,104              $    196,401
                                           ------------              ------------
</TABLE>


4.    Advances from Shareholder

      The advances from the major shareholder are non-interest  bearing and have
      no fixed terms of repayment.

      According to an agreement  dated January 2003, the  shareholder  granted a
      credit facility of $500,000 to the Company in return for preferred class C
      shares as  described in note 7. At the quarter  ended June 30,  2006,  the
      line of credit has an outstanding balance of $433,349.

5.    Accrued Severance Pay

      The Company accounts for its potential  severance  liability of its Israel
      subsidiary in accordance with EITF 88-1,  "Determination of Vested Benefit
      Obligation for a Defined  Benefit Pension Plan".  The Company's  liability
      for  severance pay is  calculated  pursuant to  applicable  labour laws in
      Israel on the most recent salary of the employees multiplied by the number
      of years of employment as of the balance sheet date for all employees. The
      Company's  liability is fully accrued and reduced by monthly deposits with
      severance pay funds and insurance policies.  As at June 30, 2006 and 2005,
      the  amount  of  the   liabilities   accrued  were  $126,188  and  $82,935
      respectively.  Severance  pay expenses for the periods ended June 30, 2006
      and 2005 were $12,812 and $21,542 respectively.

      The deposit funds include profits accumulated up to the balance sheet date
      from the Israeli  company.  The deposited funds may be withdrawn only upon
      the fulfillment of the obligation  pursuant to Israeli  severance pay laws
      or labour  agreements.  Cash  surrender  values of the deposit funds as at
      June 30,  2006 and 2005 were  $66,214  and  $46,091  respectively.  Income
      earned from the deposit funds for 2006 and 2005 was immaterial.


                                      -12-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

6.    Notes Payable

                                                         2006         2005
                                                      ----------   ----------

      Syntek Capital AG
        - a significant shareholder until July 2002   $       --   $  900,000
      DEP Technology Holdings Ltd.
        - a significant shareholder until July 2002           --      900,000
      Accrued interest                                        --      107,093
                                                      ----------   ----------

                                                              --    1,907,093

      Less: Current portion                                   --      149,200
                                                      ----------   ----------

                                                      $       --   $1,757,893
                                                      ==========   ==========


      On March 8, 2006,  the above  $900,000  note payable to Syntek  Capital AG
      ("Syntek")  was  converted  into  6,200,224  common  shares of the Company
      pursuant to an agreement dated December 22, 2005.

      In addition, the Company will issue warrants to Syntek for the purchase of
      up to 5,263,158 common shares of the Company at an exercise price of $0.19
      per  warrant.  As at June 30,  2006,  warrants  have been  issued  but not
      exercised.

      On March 8, 2006, the Company entered into an identical agreement with DEP
      Technology Holdings Ltd. ("DEP").

      Under both  agreements,  the three  founding  shareholders  will  transfer
      11.25% of their shareholdings to Syntek and DEP. As at June 30, 2006, only
      two of the founding shareholders transferred 11.25% of their shareholdings
      or 3,534,815 common shares to each of Syntek and DEP.

      After the above mentioned conversions and transfers are completed, each of
      Syntek and DEP will own 9% of the total  outstanding  common  stock of the
      Company. If the warrants are exercised,  their percentage ownership in the
      Company will increase to 13%.


                                      -13-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

7.    Capital Stock

      Authorized
       210,000,000   Common shares
       170,000,000   Preferred shares
                     Series "A": convertible, voting, par value of $0.0017 per
                                 share
                     Series "B": 10% non-cumulative dividend, redeemable,
                                 convertible, voting, par value of $0.0017 per
                                 share
                     Series "C": 10% non-cumulative dividend, convertible,
                                 voting, par value of $0.0017 per share

                                                           2006       2005
      Issued and outstanding
        128,902,659 Common shares (2005 - 69,506,898)   $219,135   $118,162
                                                        --------   --------


      Stock warrants and options:

      The Company  accounted  for its stock  options and warrants in  accordance
      with SFAS 123  "Accounting  for Stock - Based  Compensation"  and SFAS 148
      "Accounting for Stock - Based  compensation - Transition and  Disclosure."
      Value of options  granted has been  estimated by the Black Scholes  option
      pricing model. The following assumptions were used:

<TABLE>
<CAPTION>
                                         2006                       2005
                               -----------------------    -----------------------
                               Israel    International    Israel    International
                               ------    -------------    ------    -------------
<S>                            <C>       <C>              <C>       <C>
      Interest rate                 8%               8%        5%               5%
      Expected volatility          80%              80%       50%              50%
      Expected life in years        5                7         6                8
</TABLE>


      Warrants:

      On December 22, 2005,  the Company  entered into an agreement  with Syntek
      Capital AG, as part of the  agreement  for  conversion of the note payable
      into common  shares as  mentioned  in note 6,  whereby the Company  issued
      warrants to purchase up to  5,263,158  common  shares of the Company at an
      exercise price of $0.19. The value assigned to the warrants was $ 218,114.
      As of June 30, 2006,  the  warrants  have not been  converted  into common
      shares.

      On February 2, 2006, the Company entered into an identical  agreement with
      DEP Technology Holdings Ltd. as mentioned in note 6. The value assigned to
      the warrants was $ 218,114.  As of June 30,  2006,  the warrants  have not
      been converted into common shares.


                                      -14-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

7.    Capital Stock (cont'd)

      Capital Stock:

      On July 29, 2005,  the Company  issued  5,000,000  common  shares,  at par
      value,  to its  Chief  Financial  Officer  as  compensation  for  services
      rendered from  September  2002 to December 2005. It was agreed upon by the
      parties that the fair value of such  services was  $500,000,  all of which
      has been charged to wage expense.

      On  March 8,  2006,  the  Company  issued  12,400,448  common  shares  for
      repayment of the  $1,800,000  note payable to Syntek Capital AG ("Syntek")
      and DEP as mentioned in note 6.

      On April 28,  2006,  the Company  issued  2,818,182  common  shares to its
      external  consultant in exchange for  consulting  services.  It was agreed
      upon by the parties that the fair value of such services was $310,000.  At
      June 30, 2006, $51,667 has been charged to consulting expense and $258,333
      has been deferred and will be amortized over the term of the contract.

      Stock Options:

      In February 2001 the Board of Directors of the Company  adopted two option
      plans to allow  employees and  consultants to purchase  ordinary shares of
      the Company.

      Under the Israel  2001  share  option  plan  management  authorized  stock
      options  for  2,403,672  common  shares  of the  Company  having a $0.0017
      nominal  par value each and an exercise  price of  $0.0017,  and under the
      International  2001 share option plan,  stock  options for 300,000  common
      shares  having a $0.0017  nominal par value each and an exercise  price of
      $0.0017.  As of June 30, 2005,  3,672  options under the Israel 2001 share
      option plan for common stock were not yet granted.

      In the  quarter  ended March 31,  2006,  a total of 169,871  common  stock
      options were exercised by the employees.

      Under the Israel  2003  share  option  plan  management  authorized  stock
      options (on a post conversion,  post split basis) for 16,094,106 preferred
      Class "B" shares, which were converted to options for common shares of the
      Company  having a $0.0017  nominal par value each and an exercise price of
      $0.0017,  and under the International 2003 share option plan stock options
      (on a post  conversion,  post split basis) for 25,061,094  preferred Class
      "B"  shares  which were  converted  to  options  for common  shares of the
      Company  having a $0.0017  nominal par value each and an exercise price of
      $0.0017.  On  January  5,  2006,  the share  option  plan was  amended  to
      authorize an additional 1,260,000 stock options and the exercise price per
      share for the new options will be $0.12 for options  granted after January
      5, 2006. As of June 30, 2006,  38,256  options under the Israel 2003 share
      option plan were not yet granted.

      On January 12, 2006,  1,260,000  stock options under the Israel 2003 share
      options plan were granted at an exercise price of $0.12.  On June 6, 2006,
      the exercise price was amended to $0.05.  The  compensation  cost has been
      revalued  as if the  option  plan  has  been  cancelled  and  reissued  in
      accordance  with SFAS  123,  paragraph  187  Accounting  for  Stock  Based
      Payments (Modification of Awards).


                                      -15-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

7.    Capital Stock (cont'd)

      The options vest gradually over a period of 4 years from the date of grant
      for  Israel  and 10 years  (no less  than 20% per year for five  years for
      options granted to employees) for the International plan. The term of each
      option shall not be more than 8 years from the date of grant in Israel and
      10 years from the date of grant in the International plan. The outstanding
      options  that  have  vested  have  been  expensed  in  the  statements  of
      operations as follows:

            Year ended December 31, 2001   $  9,000
            Year ended December 31, 2002         --
            Year ended December 31, 2003    384,889
            Year ended December 31, 2004     25,480
            Year ended December 31, 2005     13,733
            Period ended June 30, 2005       75,032
                                           --------

                                           $508,134
                                           --------


      The following table summarizes the activity of common stock options during
      2006 and 2005:

<TABLE>
<CAPTION>
                                                    2006                          2005
                                         ---------------------------   ---------------------------
                                           Israel     International      Israel     International
                                         ----------   --------------   ----------   --------------
<S>                                      <C>          <C>              <C>          <C>

      Outstanding, beginning of period    3,745,192        1,026,797   18,455,850       25,361,094
        Granted                           1,260,000               --           --               --
        Exercised                          (169,871)              --           --               --
        Preferred stock options
          converted to common                    --               --           --               --
        Forfeited                            (1,813)              --           --               --
                                         ----------   --------------   ----------   --------------

      Outstanding, end of period          4,833,508        1,026,797   18,455,850       25,361,094
                                         ==========   ==============   ==========   ==============
      Weighted average fair value of
        common stock options granted
        during the period                $   0.0494   $           --   $       --   $           --
                                         ==========   ==============   ==========   ==============
      Weighted average exercise price
        of common stock options,
        beginning of period              $   0.0017   $       0.0017   $   0.0017   $       0.0017
                                         ==========   ==============   ==========   ==============
      Weighted average exercise price
        of common stock options
        granted in the period            $   0.0500   $           --   $       --   $           --
                                         ==========   ==============   ==========   ==============
      Weighted average exercise price
        of common stock options, end
        of period                        $   0.0143   $       0.0017   $   0.0017   $       0.0017
                                         ==========   ==============   ==========   ==============

      Weighted average remaining
        contractual life of common
        stock options                       5 years          7 years      6 years          8 years
                                         ==========   ==============   ==========   ==============
</TABLE>


                                      -16-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

8.    Income Taxes

      The Company  accounts  for income taxes in  accordance  with SFAS No. 109,
      "Accounting  for Income  Taxes".  This Standard  prescribes the use of the
      liability method whereby deferred tax asset and liability account balances
      are determined based on differences  between  financial  reporting and tax
      bases of assets and  liabilities  and are  measured  using the enacted tax
      rates.  The  effects  of  future  changes  in tax  laws or  rates  are not
      anticipated.

      Under SFAS No. 109  income  taxes are  recognized  for the  following:  a)
      amount  of  tax  payable  for  the  current  year,  and  b)  deferred  tax
      liabilities  and assets for future tax  consequences  of events  that have
      been  recognized  differently  in the  financial  statements  than for tax
      purposes.  Management  determined that accounting values of its assets and
      liabilities  recorded are not  materially  different from their tax values
      and  therefore  no  deferred  tax  assets/liabilities  have been  setup to
      account for the temporary differences.

      The Company has deferred income tax assets as follows:

<TABLE>
<CAPTION>
                                                                 2006           2005
                                                             -----------    -----------
<S>                                                          <C>            <C>

      Deferred income tax assets
        Non-capital losses carried forward                   $ 2,602,000    $ 2,310,000
        Valuation allowance for deferred income tax assets    (2,602,000)    (2,310,000)
                                                             -----------    -----------

                                                             $        --    $        --
                                                             ===========    ===========
</TABLE>


      The Company  provided a valuation  allowance  equal to the deferred income
      tax assets because it is not presently more likely than not that they will
      be realized.

      As at June 30,  2006,  the Company has  approximately  $10,408,000  of tax
      losses  carried  forward in the parent  company and no tax losses  carried
      forward in the Israeli  subsidiary.  Losses in the United  States,  if not
      utilized will expire in twenty years from the year of origin as follows:

            December 31, 2020    $   909,500
                         2021      2,398,000
                         2022        778,000
                         2023      5,005,000
                         2024        581,000
                         2025        560,500
                         2026        176,000
                                 -----------
                                 $10,408,000
                                 -----------


                                      -17-
<PAGE>

M-WISE, INC.
Notes to Financial Statements
June 30, 2006 and 2005

9.    Related Party Transactions

      During the period,  the Company  incurred  directors  consulting  fees and
      salaries in the amount of $110,000 (2005,  $110,000). At June 30, 2006 and
      2005, $566,000 and $462,000 respectively, was unpaid and included in other
      payables and accrued expenses.

      These  transactions  were in the normal course of business and recorded at
      an  exchange  value  established  and agreed  upon by the above  mentioned
      parties.

10.   Major Customers

      In the six  months  ended  June 30,  2006,  the  Company  had  four  major
      customers  which accounted for 39%, 18%, 18% and 13% of the total revenue.
      71% of the Company's  total sales in the June 30, 2006 quarter were in the
      United States.  In the six months ended June 30, 2005, the Company had one
      major  customer  in Asia which  primarily  accounted  for 63% of the total
      revenue.

11.   Commitments

      a)    The company is committed  under an operating  lease for its premises
            expiring June 30, 2008.  Minimum annual payment  exclusive of taxes,
            insurance,  and  maintenance  costs) under the lease is $54,000.  In
            addition,  the company is committed under operating vehicle lease as
            follows:

            Twelve months ended June 30, 2007   $ 90,000
            Twelve months ended June 30, 2008     58,000
            Twelve months ended June 30, 2009     32,000
            Twelve months ended June 30, 2010      2,000
                                                --------
                                                $182,000
                                                --------

      b)    On February 10, 2006, the Company  entered into an equity  financing
            agreement with a Delaware limited partnership ("DLP"), to sell up to
            20,000,000 of the Company's  common shares (up to $10,000,000)  over
            the  course of 36  months.  The  amount  that the  Company  shall be
            entitled to request from each of the purchase "Puts", shall be equal
            to either 1) $300,000 or 2) 200% of the average daily volume ("ADV")
            multiplied by the average of the 3 daily closing prices  immediately
            preceding  the Put  date.  The ADV  shall be  computed  using the 10
            trading  days  prior to the Put  Date.  The  Purchase  Price for the
            common stock identified in the Put Notice shall be set at 93% of the
            lowest  closing  bid price of the common  stock  during the  Pricing
            Period.  The Pricing Period is equal to the period  beginning on the
            Put  Notice  date and  ending  on and  including  the date that is 5
            trading days after such Put Date. There are put restrictions applied
            on days  between the Put Date and the Closing  Date with  respect to
            that Put.  During this time,  the  Company  shall not be entitled to
            deliver another Put Notice.

            In connection with the equity financing  agreement,  the Company has
            issued  a  preliminary  prospectus  whereby  the DLP  and a  current
            significant  shareholder can sell up to 30,000,000  common shares at
            market value.


                                      -18-
<PAGE>

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

The following  discussion  should be read in conjunction  with our  consolidated
financial statements and related notes included elsewhere in this Report.

This  filing  contains  forward-looking   statements.  The  words  "anticipate,"
"believe,"  "expect,  "plan," "intend," "seek,"  "estimate,"  "project," "will,"
"could," "may," and similar expressions are intended to identify forward-looking
statements. These statements include, among others, information regarding future
operations,  future  capital  expenditures,  and  future  net  cash  flow.  Such
statements reflect our management's  current views with respect to future events
and  financial  performance  and  involve  risks and  uncertainties,  including,
without  limitation:  (a) the timing of our sales  could  fluctuate  and lead to
performance  delays;  (b) without  additional equity or debt financing we cannot
carry out our business plan; (c) our  stockholders  have  pre-emptive  rights to
purchase securities of m-Wise,  which could impair our ability to raise capital;
(d) we operate  internationally and are subject to currency fluctuations,  which
could cause us to incur losses even if our operations are profitable; (e) we are
dependent  upon  certain  major  customers,  and the loss of one or more of such
customers  could  adversely  affect  our  revenues  and  profitability;  (f) our
research and development  facilities are located in Israel and we have important
facilities  and resources  located in Israel which could be negatively  affected
due to military or political tensions; (g) certain of our officers and employees
are required to serve in the Israel  defense forces and this could force them to
be absent from our business for extended  periods;  (h) the rate of inflation in
Israel may negatively  impact our costs if it exceeds the rate of devaluation of
the NIS against the Dollar.  Should one or more of these risks or  uncertainties
occur, or should underlying  assumptions  prove to be incorrect,  actual results
may vary materially and adversely from those anticipated, believed, estimated or
otherwise indicated.  These forward-looking statements speak only as of the date
of  this  prospectus.  Subject  at all  times  to  relevant  federal  and  state
securities law disclosure requirements,  we expressly disclaim any obligation or
undertaking  to  disseminate  any  update or  revisions  to any  forward-looking
statement contained herein to reflect any change in our expectations with regard
thereto or any changes in events,  conditions or circumstances on which any such
statement is based. Consequently,  all of the forward-looking statements made in
this Report are  qualified by these  cautionary  statements  and there can be no
assurance of the actual results or developments.


                                      -3-
<PAGE>


RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2006 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2005.

REVENUES

License fees and products. Revenues from license fees and products decreased 46%
to $622,650 for the six months ended June 30, 2006 from  $1,142,938 for the same
period in 2005. The decrease  primarily  consisted of $1,026,850  revenues which
was derived from a one time  licensing fee  recognized in 2005 from our contract
with First Advanced Multi-Media Entertainment.

Revenue  share.  Revenues from revenue share  increased 147% to $160,072 for the
six months  ended June 30, 2006 from  $64,689  for the same period in 2005.  The
increase primarily consisted of revenues from current customers who were not our
customers  during the first six months of 2005 and from  customers  that did not
generate revenues from selling services to end users previously.

Customer  services and technical  support.  Revenues from customer  services and
technical  support  decreased  42% to $241,978 for the six months ended June 30,
2006 from $416,155 for the same period in 2005. The decrease primarily consisted
of  $231,381  revenues  derived in 2005 from two  customers  who have ceased the
usage of our support services.

Cost of revenues.

Cost of revenues  decreased  69% to $111,740  for the six months  ended June 30,
2006 from $357,373 for the same period in 2005.  This decrease was primarily due
to lower  revenues  from License fees and  products and revenues  from  customer
services and technical support.

Operating expenses.

Research and  development.  Research and development  expenses  decreased 23% to
$272,749  for the six months  ended  June 30,  2006 from  $355,528  for the same
period in 2005. This decrease was primarily due to a $70,159 decrease in payroll
and related expenses.  Research and development expenses, stated as a percentage
of  revenues,  increased  to 27% for the six months ended June 30, 2006 from 22%
for the same period in 2005.

General and administrative.

General and administrative  expenses increased 5% to $613,406 for the six months
ended June 30, 2006 from $584,584 for the same period in 2005. This increase was
primarily  due to a $88,837  increase  in payroll  and  related  expenses  and a
$32,521 increase in consulting expenses,  partially offset by a $75,753 decrease
in  marketing  expenses  and a $36,012  decrease in rent  expenses.  General and
administrative  expenses,  stated as a percentage of revenues,  increased to 60%
for the six months ended June 30, 2006 from 36% for the same period in 2005.


                                      -4-
<PAGE>


Financing expenses.

Financing expenses.  Our financing expenses increased 1,258% to $251,518 for the
six months  ended June 30, 2006 from  $18,521  for the same period in 2005.  The
increase  primarily  consisted  of  $222,104  financing  fee paid by issuance of
common shares.

LIQUIDITY AND CAPITAL RESOURCES

Our principal  sources of liquidity  since our inception have been private sales
of equity securities,  stockholder loans,  borrowings from banks and to a lesser
extent, cash from operations.  We had cash and cash equivalents of $68,536 as of
June 30, 2006 and $573 as of December 31, 2005. Our initial capital came from an
aggregate  investment  of $1.3 million from Cap Ventures  Ltd. To date,  we have
raised an aggregate  of  $5,300,000  from  placements  of our equity  securities
(including the investment by Cap Ventures and a $4,000,000  investment by Syntek
Capital AG and DEP Technology Holdings Ltd.). We have also borrowed an aggregate
of $1,800,000 from Syntek Capital AG and DEP Technology  Holdings Ltd. and as of
the date of this prospectus we have no funds available to us under bank lines of
credit. We have a credit line agreement with Miretzky  Holdings  Limited.  As of
June 30, 2006, $433,349 is outstanding under the credit line. The credit line is
for $500,000.  The credit line has no termination  date and does not provide for
interest payments.

Other  than  the  credit  line  agreement  with  Miretzky,  we do not  have  any
commitments  from any of our  affiliates  or  current  stockholders,  to provide
additional sources of capital to us. We do have an equity line for $10.0 million
with  Dutchess  Private  Equity Fund  although we have not yet made any draws on
such line.  We will need  approximately  $1.0 million for the next twelve months
for our operating costs which mainly include  salaries,  office rent and network
connectivity,  which  total  approximately  $60,000  per month,  and for working
capital. We intend to finance this amount from our ongoing sales and through the
sale of either  our debt or  equity  securities  or a  combination  thereof,  to
affiliates,  current  stockholders  and/or new  investors.  Currently  we do not
believe that our future capital  requirements  for equipment and facilities will
be material.

 Operating activities.

For the six months  ended  June 30,  2006 we used  $34,974 of cash in  operating
activities  primarily due to our net loss of $224,713 and a $374,141 increase in
accounts  receivables,  partially  offset  by  $222,104  financing  fee  paid by
issuance of common shares and a $136,963 increase in deferred  revenues.  In the
same period in 2005 we used $175,009 of cash in operating  activities  primarily
due to a $669,890  decrease in deferred  revenues,  partially  offset by our net
earnings  of $307,776  and a $140,504  increase  in other  payables  and accrued
liabilities.

Investing and financing activities.

Property and  equipment  consist  primarily of computers,  software,  and office
equipment.  For the six months ended June 30,  2006,  net cash used in investing
activities  was $28,829  consisting of an  investment in equipment.  In the same
period in 2005 net cash used in investing  activities was $32,744  consisting of
an  investment in  equipment.  For the six months ended June 30, 2006,  net cash
provided  by  financing  activities  was  $131,766  primarily  due to a $142,084
increase in advances from shareholder, partially offset by a $10,318 decrease in
bank  indebtedness.  In the same period in 2005,  net cash provided by financing
activities  was $83,380 due to a $75,192  increase in advances from  shareholder
and a $23,200 increase in notes payables, partially offset by a $15,012 decrease
in bank indebtedness.


                                      -5-
<PAGE>


DIVIDENDS

We have not paid any  dividends  on our common  stock.  We  currently  intend to
retain any earnings for use in our  business,  and  therefore do not  anticipate
paying cash dividends in the foreseeable future.

OFF BALANCE SHEET ARRANGEMENTS

None.

Item 3.  Controls and Procedures

With the  participation  of management,  our Chief  Executive  Officer and Chief
Financial Officer evaluated our disclosure controls and procedures within the 90
days  preceding  the  filing  date of this  quarterly  report.  Based  upon this
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that our  disclosure  controls and  procedures  are  effective in ensuring  that
material information required to be disclosed is included in the reports that we
file with the Securities and Exchange Commission.

There  were no  significant  changes  in our  internal  control  over  financial
reporting to the  knowledge  of our  management,  or in other  factors that have
materially affected or are reasonably likely to materially affect these internal
controls over financial reporting subsequent to the evaluation date.

PART II
OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item  2. Changes in Securities  and Small  Business  Issuer  Purchases of Equity
         Securities

In April 2006, we issued 2,818,182  common shares to a consultant  pursuant to a
technology consulting agreement we entered into with him.

Item 3.  Default upon Senior Securities

Not applicable.

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

Not applicable.


                                      -6-
<PAGE>


Item 5.  Other Information

Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

3.1   Amended and restated Certificate of Incorporation**
3.2   Bylaws**
4.1   Purchase and registration rights agreement and schedule of details**
10.1  Amended and Restated Employment Agreement with Mordechai Broudo**
10.2  Amendment to Amended and Restated Employment Agreement with Mordechai
      Broudo**
10.3  Amended and Restated Employment Agreement with Shay Ben-Asulin**
10.4  Amendment to Amended and Restated Employment Agreement with Shay
      Ben-Asulin**
10.5  Employment Agreement, Gabriel Kabazo**
10.6  Confidentiality rider to Gabriel Kabazo Employment Agreement**
10.7  Employment Agreement Asaf Lewin**
10.8  2003 International Share Option Plan**
10.9  Form of Option Agreement, 2003 International Share Option Plan**
10.10 2001 International Share Option Plan**
10.11 Form of Option Agreement, 2001 International Share Option Plan**
10.12 2003 Israel Stock Option Plan**
10.13 Form of Option Agreement, 2003 Israel Stock Option Plan**
10.14 2001 Israel Share Option Plan**
10.15 Form of Option Agreement, 2001 Israel Share Option Plan** 10.16 Investors'
      Rights Agreement dated January 11, 2001**
10.17 Stockholders Agreement**
10.18 Agreement for Supply of Software and Related Services dated October 14,
      2002, by and between i Touch plc and m-Wise, Inc.*
10.19 Purchase agreement between m-Wise, Inc. and Comtrend Corporation dated May
      22, 2002**
10.20 Amended and Restated Consulting agreement between Hilltek Investments
      Limited and m-Wise dated November 13, 2003**
10.21 Consulting agreement between Hilltek Investments Limited and m-Wise dated
      June 24, 2003, subsequently amended see exhibit 10.20 above**
10.22 Amendment to Investors' Rights Agreement dated October 2, 2003**
10.23 Appendices to 2003 Israel Stock Option Plan**
10.24 Appendices to 2001 Israel Share Option Plan**
10.25 Credit Line Agreement between m-Wise, Inc. and Miretzky Holdings, Limited
      dated January 25, 2004**
10.26 Termination and Release Agreement by and among the Company and Syntek
      capital AG. (Incorporated by reference to Exhibit 10.1 of the current
      report on Form 8-K filed on January 13, 2006)
10.27 Termination and Release Agreement dated February 2, 2006 by and among the
      Company and DEP Technology Holdings Ltd (Incorporated by reference to
      Exhibit 10.1 of the current report on Form 8-K filed on February 7, 2006)
21.   List of Subsidiaries** 31.1 Rule 13a-14(a)/15d-14(a) Certification.*


                                      -7-
<PAGE>

31.2  Rule 13a-14(a)/15d-14(a) Certification.*
32.1  Certification by the Chairman Relating to a Periodic Report Containing
      Financial Statements. ***
32.2  Certification by the Chief Financial Officer Relating to a Periodic Report
      Containing Financial Statements. ***

-------------
*     Filed herewith.

**    Incorporated by reference from the  registration statement  filed with the
Securities and Exchange Commission Registration Statement on Form SB-2 (Reg. No.
333-106160).

***   The Exhibit attached to this Form 10-QSB  shall not be deemed  "filed" for
purposes of Section 18 of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to liability under that section, nor shall
it be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set forth by specific
reference in such filing.

(b)   Reports on Form 8-K

The Company  filed a current  report on Form 8-K on January 13, 2006 pursuant to
entering into a Termination  and Release  Agreement  with Syntek  capital Ag.The
Company  issued Syntek an aggregate of 5,561,994  shares of its common stock and
warrants to purchase  5,263,158  shares  shares of its Common  stock at $.19 per
shares for a period of three years.

      The  Company  filed a  current  report  on Form 8-K on  February  7,  2006
disclosing  that the Company  entered into a Termination  and Release  Agreement
with DEP  Technology  Holdings  Ltd.,  The Company  issued DEP an  aggregate  of
5,561,994  shares of its common stock and warrants to purchase  5,263,158 shares
of its Common stock at $.19 per shares for a period of three years.


                                      -8-
<PAGE>


                                   SIGNATURES

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

                                        m-WISE, INC.
                                        (Registrant)

Date:  August 14, 2006                  /s/ Shay Ben-Asulin
                                        ------------------------
                                        Name:  Shay Ben-Asulin
                                        Title: Chairman


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