================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

|X|   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

                For the quarterly period ended October 31, 2006.

|_|   Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act
      of 1934

             For the transition period from __________ to __________

                         Commission file number: 0-32801

                                  TISSERA, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                                BERT Logic, Inc.
                           (Former Name of Registrant)

               Washington                                         91-2034750
    (State or other jurisdiction of                            (I.R.S. Employer
     incorporation of organization)                          Identification No.)

      Maskit  8, 4th floor, Herzlia                             46733  Israel
(Address of principal executive offices)                          (Zip Code)

                    Issuer's telephone number: +972-9-9561151

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 |_|

As of December 12, 2006, the registrant had 27,814,332 shares of common stock
outstanding.

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

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

================================================================================

<PAGE>

Tissera, Inc.

INDEX

                                                                     PAGE NUMBER
                                                                     -----------
PART I. FINANCIAL INFORMATION

Item 1.  Financial statements
           (unaudited)

         Consolidated Balance Sheets                                       3

         Consolidated Statements of Operations                             4

         Consolidated Statements of Changes in Stockholders'
           Equity (Deficiency)                                             5

         Consolidated Statements of Cash Flows                             6

         Notes to Financial Statements                                   7-13

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                            13

Item 3.  Controls and Procedures                                          16

PART II. OTHER INFORMATION                                                17

Item 1.  Legal Proceedings                                                17

Item 2.  Change in Securities                                             17

Item 3.  Defaults Upon Senior Securities                                  17

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

Item 5.  Other Information                                                17

Item 6.  Exhibits                                                         17

SIGNATURES                                                                18

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Financial statements (unaudited)


                                                                 DRAFT: 14/12/06

                                  TISSERA INC.

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

                        CONSOLIDATED FINANCIAL STATEMENTS

                             AS OF OCTOBER 31, 2006

                                 IN U.S. DOLLARS

                                    UNAUDITED

                                      INDEX

                                                                           Page
                                                                           ----
Consolidated Balance Sheets                                                  2

Consolidated Statements of Operations                                        3

Statements of Changes in Stockholders' Equity (Deficiency)                   4

Consolidated Statements of Cash Flows                                        5

Notes to Consolidated Financial Statements                                6 - 15

                                   ----------

<PAGE>

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

CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. dollars in thousands (except share and per share data)

<TABLE>
<CAPTION>
                                                                                            October 31,   July 31,
                                                                                                2006        2006
                                                                                            -----------   --------
                                                                                             Unaudited
                                                                                            -----------
<S>                                                                                           <C>         <C>
  ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                                                   $    425    $    111
  Short-term deposit                                                                               192         844
  Prepaid expenses and other current assets                                                        161         174
                                                                                              --------    --------
Total current assets                                                                               778       1,129
                                                                                              --------    --------
RESTRICTED CASH                                                                                      5           5
                                                                                              --------    --------
SEVERANCE PAY FUND                                                                                  36          33
                                                                                              --------    --------
PROPERTY AND EQUIPMENT, NET                                                                         11          13
                                                                                              --------    --------
Total assets                                                                                  $    830    $  1,180
                                                                                              ========    ========
  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Trade payables                                                                              $      4    $      4
  Other accounts payable and accrued expenses                                                      647         626
                                                                                              --------    --------
Total current liabilities                                                                          651         630
                                                                                              --------    --------
ACCRUED SEVERANCE PAY                                                                               50          44
                                                                                              --------    --------
Total liabilities                                                                                  701         674
                                                                                              --------    --------
COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY:
  Stock capital (Note 5) -
    Common stock of $ 0.0001 par value each -
      Authorized: 100,000,000 shares as of October 31, 2006 and July 31, 2006; Issued and
      outstanding: 27,814,332 as of October 31, 2006 and July 31, 2006.                              3           3
    Preferred stock of $ 0.0001 par value each -
      Authorized: 20,000,000 shares as of October 31, 2006 and July 31, 2006; Issued and
      outstanding: 0 shares as of October 31, 2006 and July 31, 2006                                --          --
  Additional paid-in capital                                                                    28,991      28,839
  Deferred stock based compensation                                                                 --          (4)
  Deficit accumulated during the development stage                                             (28,865)    (28,332)
                                                                                              --------    --------
Total stockholders' equity                                                                         129         506
                                                                                              --------    --------
Total liabilities and stockholders' equity                                                    $    830    $  1,180
                                                                                              ========    ========
</TABLE>

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


                                       -2-

<PAGE>

                                                                    TISSERA INC.
                                                     (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
                                                             Three months ended                    (inception date)
                                                                  October 31,        Year ended        through
                                                         -------------------------     July 31,       October 31,
                                                             2006         2005          2006             2006
                                                         -----------   -----------   -----------   ----------------
                                                                 Unaudited                             Unaudited
                                                         -------------------------                 ----------------
<S>                                                      <C>           <C>           <C>                <C>
Operating expenses:
  Research and development (including cost (income)
    related to options and warrants granted to
    employees and to others at the amount of $ (47)
    and $ 0 for the three months ended October 31,
    2006 and 2005, respectively and $ (20) for the
    year ended July 31, 2006)                            $       254   $       296   $     1,031        $15,318
  General and administrative (including cost (income)
    related to warrants, options and shares granted to
    service providers, employees and directors in the
    amount of $ 109 and $ (3)  for the three months
    ended October 31, 2006 and 2005, respectively and
    $ 27 for the year ended July 31, 2006)                       274           165           729         13,527
                                                         -----------   -----------   -----------        -------
                                                                 528           461         1,760         28,845
Financial income (expenses), net                                  (2)           19            55            123
                                                         -----------   -----------   -----------        -------
Loss from continuing operations before income taxes              530           442         1,705         28,722
Income taxes                                                       3             3            10             51
                                                         -----------   -----------   -----------        -------
Net loss from continuing operations                              533           445         1,715         28,773
Loss from discontinued operations                                 --            --            --             92
                                                         -----------   -----------   -----------        -------
Net loss                                                 $       533   $       445   $     1,715        $28,865
                                                         ===========   ===========   ===========        =======
Basic and diluted net loss per share from continuing
  operations                                             $     0.019   $      0.02   $      0.06
                                                         ===========   ===========   ===========
Weighted average number of shares used in computing
    basic and diluted net loss per share                  27,814,332    27,582,114    27,662,795
                                                         ===========   ===========   ===========
</TABLE>


                                       -3-

<PAGE>

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

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

<TABLE>
<CAPTION>
                                                                                                   Deficit
                                                                                                 accumulated       Total
                                                   Stock capital     Additional     Deferred      during the   stockholders'
                                               ----------------------  paid-in     stock based   development      equity
                                                 Number     Amount     capital    compensation      stage      (deficiency)
                                               ----------   ------   ----------   ------------   -----------   -------------
<S>                                            <C>           <C>       <C>            <C>         <C>            <C>
Balance as of July 31, 2000                    15,036,000    $   2     $     8        $  --       $     (5)      $      5
Stock issued for cash on July 17, 2001          3,000,000     *)--          40           --             --             40
Contribution of capital                                --       --          15           --             --             15
Net loss                                               --       --          --           --            (30)           (30)
                                               ----------    -----     -------        -----       --------       --------
Balance as of July 31, 2001                    18,036,000        2          63           --            (35)            30
Contribution of capital                                --       --          15           --             --             15
Net loss                                               --       --          --           --            (39)           (39)
                                               ----------    -----     -------        -----       --------       --------
Balance as of July 31, 2002                    18,036,000        2          78           --            (74)             6
Contribution of capital                                --       --          15           --             --             15
Net loss                                               --       --          --           --            (31)           (31)
                                               ----------    -----     -------        -----       --------       --------
Balance as of July 31, 2003                    18,036,000        2          93           --           (105)           (10)
Stock issued for cash related to PPM1, net
  of $ 176 of cash issuance expenses            1,767,200     *)--       2,033           --             --          2,033
Stock issued for cash related to PPM2, net
  of $ 517 of cash issuance expenses            3,142,858        1       4,983           --             --          4,984
Stock based compensation related to warrants
  granted to service providers                         --       --      11,429           --             --         11,429
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
Stock based compensation related to warrants
  granted to investors                                 --       --       1,980           --             --          1,980
Warrants granted to Yeda and to service
  providers                                            --       --        (362)          --             --           (362)
Amortization of stock based compensation
  related to options granted to employees
  and directors                                        --       --          --          176             --            176
Deferred stock based compensation                      --       --          44          (44)            --             --
Exercise of options                                25,200     *)--          --           --             --             --
Net loss                                               --       --          --           --         (3,983)        (3,983)
                                               ----------      ---     -------        -----       --------       --------
Balance as of July 31, 2005                    27,582,114        3      28,859          (31)       (26,617)         2,214
Exercise of options                               232,218     *)--        *)--           --             --           *)--
Warrants granted to service providers                  --       --         (20)          --             --            (20)
Amortization of stock based compensation
  related to options granted to employees
  and directors                                        --       --          --           27             --             27
Net loss                                               --       --          --           --         (1,715)        (1,715)
                                               ----------    -----     -------        -----       --------       --------
Balance as of July 31, 2006                    27,814,332        3      28,839           (4)       (28,332)           506
Deferred stock-based compensation                      --       --          (4)           4             --             --
Amortization of stock based compensation
  related to options granted to employees
  and directors                                        --       --         156           --             --            156
Net loss                                               --       --          --           --           (533)          (533)
                                               ----------    -----     -------        -----       --------       --------
Balance as of October 31, 2006 (unaudited)     27,814,332    $   3     $28,991        $  --       $(28,865)      $    129
                                               ==========    =====     =======        =====       ========       ========
</TABLE>

*)    Represents an amount lower than $ 1.

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


                                       -4-

<PAGE>

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. dollars in thousands

<TABLE>
<CAPTION>
                                                                                                  From May
                                                                                                   31, 2000
                                                                     Three months                (inception
                                                                         ended          Year        date)
                                                                      October 31,       ended      through
                                                                   ----------------   July 31,   October 31,
                                                                    2006      2005      2006       2006
                                                                   ------   -------   --------   -----------
                                                                       Unaudited            Unaudited
                                                                   ----------------   ----------------------
<S>                                                                <C>      <C>       <C>        <C>
Cash flows from operating activities:
  Net loss                                                         $(533)   $ (445)   $(1,715)   $(28,865)
  Adjustments required to reconcile net loss to net cash used
    in operating activities:
    Depreciation                                                       2         2          8          27
    Expenses (income) related to warrants granted to Yeda and
      to service providers                                            47        (9)       (20)     11,094
    Expenses related to options granted to employees and
      directors                                                      109         6         27       1,442
    Expenses related to shares and warrants granted to service
      providers and compensation to investors                         --        --         --       9,346
    Interest accrued on short-term deposit                           (9)        --        (17)        (26)
    Decrease (increase) in accounts receivable and prepaid
      expenses                                                        13        17         91        (161)
    Increase (decrease) in trade payables                             --        (1)        (1)          4
    Increase (decrease) in other accounts payable and accrued
      expenses                                                        21       (24)       (34)        647
    Increase (decrease) in accrued severance pay, net                  3        (1)         1          14
                                                                   -----    ------    -------    --------
Net cash used in continuing operating activities                    (347)     (455)    (1,660)     (6,478)
Net cash provided by discontinued operating activities                --        --         --          75
                                                                   -----    ------    -------    --------
Total net cash used in operating activities                         (347)     (455)    (1,660)     (6,403)
                                                                   -----    ------    -------    --------
Cash flows from investing activities:
  Short-term deposit                                                 661        --       (827)       (166)
  Sales of property and equipment                                     --        --         --           9
  Purchase of property and equipment                                  --        --         --         (47)
  Restricted cash                                                     --        (5)        (5)         (5)
                                                                   -----    ------    -------    --------
Net cash provided by (used in) continuing investing activities       661        (5)      (832)       (209)
Net cash provided by (used in) discontinued investing activities      --        --         --         (15)
                                                                   -----    ------    -------    --------
Total net cash provided by (used in) investing activities            661        (5)      (832)       (224)
                                                                   -----    ------    -------    --------
Cash flows from financing activities:
  Issuance of shares and warrants, net                                --        --      *) --       7,017
                                                                   -----    ------    -------    --------
Net cash provided by continuing financing activities                  --        --      *) --       7,017
Net cash provided by discontinued financing activities                --        --         --          35
                                                                   -----    ------    -------    --------
Total net cash provided by financing activities                       --        --      *) --       7,052
                                                                   -----    ------    -------    --------
Increase (decrease) in cash and cash equivalents                     314      (460)    (2,492)        425
Cash and cash equivalents at beginning of period                     111     2,603      2,603          --
                                                                   -----    ------    -------    --------
Cash and cash equivalents at end of period                         $ 425    $2,143    $   111    $    425
                                                                   =====    ======    =======    ========
</TABLE>

*)    Represents an amount lower than $ 1.

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


                                       -5-

<PAGE>

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

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

NOTE 1:- GENERAL

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

            On September 4, 2003, the former president of the Company (and a
            former major shareholder) entered into a share purchase agreement
            ("the Agreement") with the Company's existing shareholders, who
            purchased 15,000,000 shares of the then issued and outstanding
            18,036,000 shares of the Company's Common stock. In connection with
            the agreement, the president of the Company resigned as president
            and sole director of the Company. Also, in connection with the
            Agreement, the Company obtained forgiveness of the remaining
            promissory note of $10 and accrued interest of $2 that was due on
            May 31, 2004 in respect of the Company's license to sell Bit Error
            Rate Testers ("the License") and agreed to convert the License to a
            worldwide non-exclusive license. Also, in connection with the
            Agreement, the former president of the Company agreed to forgive his
            loan, in the amount of $1.

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

            The statements of operations for the year ended July 31, 2004,
            include a gain in the amount of $13, reported in discontinued
            operations, related to the forgiveness of the note and the loan
            described above.

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

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

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


                                       -6-

<PAGE>

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

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

NOTE 1:- GENERAL (Cont.)

      c.    Going concern considerations:

            The Company's accumulated deficit and net loss as of October 31,
            2006 and for the three months then ended, amounted to approximately
            $28,665 and $533, respectively. In addition, the Company has
            finalized its current research and development agreement with Yeda
            (see Note 2) so as to reduce its current R&D expenses. The Company's
            ability to continue to operate as a going concern is dependent on
            its ability to generate sufficient cash flows to meet its
            obligations on a timely basis, to obtain additional financing and to
            ultimately attain profitability. The Company is in the development
            stage and, as such, has no revenues (and is not intended to generate
            revenues in the near future), has incurred recurring operating
            losses, and an accumulated deficit and has a negative cash flow from
            operating activities (amounting to $347 for the three months ended
            October 31, 2006). The process of developing commercial products
            will require significant additional expenditures for research and
            development, maintaining the key technology license, pre-clinical
            testing and clinical trials, as well as obtaining regulatory
            approval. These activities, together with general and administrative
            expenses, are expected to result in substantial operating losses in
            the foreseeable future.

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

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

      d.    Risk factors:

            The Company depends on Yeda to conduct its research and development
            activities. As discussed in Note 2, the research services are to be
            provided until April 2007. Thereafter, the Company will have to
            negotiate for new research services to be received, whether, by Yeda
            or by other service providers. If Yeda fails to provide the research
            services or is unwilling to continue to provide research services
            after April 2007 at terms that are acceptable to the Company, the
            Company may be required to seek alternative sources of research
            services. A change in service provider could result in delays in the
            research activities, increase in expense and could adversely affect
            the Company's results of operations and cash flows. In addition, as
            discussed in Note 2, Yeda may terminate the research and license
            agreement ("the Agreement") under certain conditions.


                                       -7-

<PAGE>

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

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

NOTE 2:- RESEARCH AND LICENSE AGREEMENT

            On October 8, 2003, the Company entered into a research and license
            agreement ("the agreement") with Yeda. The Company conducted the
            research for a period of three years, at the Weizmann Institute of
            Science (the commercialization company of Yeda). On April 11, 2006,
            the Company has signed an agreement with Yeda, extending the
            research period by one additional year, until April 2007. The
            research relates to an invention comprising methods of organ
            transplantation employing nephric tissues. The license that was
            granted to the Company shall expire at the later of (i) the
            expiration of the patents in the country of sale, or (ii) 15 years
            from the date of receipt of FDA new drug approval (in the United
            States), or the equivalent in any other country in which the
            products are sold. In addition, Yeda may terminate the agreement if
            the Company will fail to achieve certain commercialization and
            development achievements, as defined in the agreement. Currently,
            the Company complies with all of the terms of the agreement.

            The Company committed to grant Yeda, within 120 days of the date on
            which the agreement is signed, (i) a warrant, exercisable at an
            aggregate exercise price of $0.9 to purchase up to 2.23% of the
            issued and outstanding Common stock of the Company immediately
            following the exercise of such warrant, and (ii) a warrant,
            exercisable at an aggregate exercise price of $1.1 to purchase up to
            2.67% of the issued and outstanding shares of the Company
            immediately following the exercise of such warrant, provided that
            the maximum number of shares of Common stock that Yeda may exercise
            under the warrants shall be 3,010,699 and 3,612,839, respectively
            (the number of shares of Common stock shall be appropriately
            adjusted in the event of stock splits, stock dividends, capital
            reorganizations, reclassifications, recapitalizations and the like
            as well as issuances or sales by the Company of shares for par value
            only, for a consideration of less than par value and for no
            consideration, all in accordance with the terms and conditions of
            said warrant). Each such warrant shall be exercisable for a period
            beginning one year after the date on which the agreement is signed,
            and ending at the later of (a) one year following the termination of
            the agreement and (b) October 7, 2013. As of the balance sheet date,
            1,433,125 of the Company's shares of Common stock are underlying the
            warrants. The warrants shall be exercisable on a cashless basis.

            Since the license is used for research and development activities
            and no alternative use exists for the license, the cost of the
            license was recorded as research and development expenses amounting
            to $150 and $225 for the three months ended October 31, 2006 and
            2005, respectively. The fair value of the warrants was determined
            based on the number of shares underlying the warrants as of the
            balance sheet date. The number of shares underlying the warrants as
            of the balance sheet date was determined based on the actual issued
            and outstanding shares of the Company and any options to acquire
            Company's shares for a nominal consideration, totaling 1,570,861
            shares of Common stock. Each such warrant shall be immediately
            exercisable at fair value till the later of (a) one year following
            the termination of the agreement and (b) October 7, 2013.

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


                                       -8-

<PAGE>

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

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

NOTE 2:- RESEARCH AND LICENSE AGREEMENT (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.

            According to the agreement and addendums, the Company paid Yeda with
            regard to the first second and third years of the research period
            commencing April 9, 2003, an annual amount of $900.

            In April 2006, the Company signed a third addendum to the agreement
            with Yeda and committed to pay Yeda an amount of $600 to be paid in
            four equal installments payable in advance in respect of the fourth
            year of the research period ending April 9, 2007.

            According to the agreement, if within the fourth research year, the
            Company raises at least $1,000 due to an investment or merger as
            defined in the agreement, or granted an amount of $300 designated to
            finance the research and development then the budget shall increase
            to $900.

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

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES

      a.    The significant accounting policies followed in the preparation of
            these financial statements are identical to those applied in the
            preparation of the latest annual financial statements except as
            detailed in c below.

      b.    Use of estimates:

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions that affect the amounts reported in the financial
            statements and accompanying notes. Actual results could differ from
            those estimates.


                                       -9-

<PAGE>

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

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

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

      c.    On August 1, 2006, the Company adopted Statement of Financial
            Accounting Standards No. 123 (revised 2004), "Share-Based Payment"
            ("SFAS 123(R)") which requires the measurement and recognition of
            compensation expense based on estimated fair values for all
            share-based payment awards made to employees and directors. SFAS
            123(R) supersedes Accounting Principles Board Opinion No. 25,
            "Accounting for Stock Issued to Employees" ("APB 25"), for periods
            beginning in fiscal 2006. In March 2005, the Securities and Exchange
            Commission issued Staff Accounting Bulletin No. 107 ("SAB 107")
            relating to SFAS 123(R). The Company has applied the provisions of
            SAB 107 in its adoption of SFAS 123(R).

            SFAS 123(R) requires companies to estimate the fair value of
            equity-based payment awards on the date of grant using an
            option-pricing model. The value of the portion of the award that is
            ultimately expected to vest is recognized as an expense over the
            requisite service periods in the Company's consolidated income
            statement. Prior to the adoption of SFAS 123(R), the Company
            accounted for equity-based awards to employees and directors using
            the intrinsic value method in accordance with APB 25 as allowed
            under Statement of Financial Accounting Standards No. 123,
            "Accounting for Stock-Based Compensation" ("SFAS 123").

            The Company adopted SFAS 123(R) using the modified prospective
            transition method, which requires the application of the accounting
            standard starting from August 1, 2006, the first day of the
            Company's fiscal year 2006. Under that transition method,
            compensation cost recognized in the three months period ended
            October 31, 2006, includes: (a) compensation cost for all
            share-based payments granted prior to, but not yet vested as of
            August 1, 2006, based on the grant date fair value estimated in
            accordance with the original provisions of Statement 123, and (b)
            compensation cost for all share-based payments granted subsequent to
            August 1, 2006, based on the grant-date fair value estimated in
            accordance with the provisions of Statement 123(R). Results for
            prior periods have not been restated.

            The Company recognizes compensation expenses for the value of its
            awards, which have graded vesting based on the accelerated
            attribution method over the requisite service period of each of the
            awards, net of estimated forfeitures. Estimated forfeitures are
            based on actual historical pre-vesting forfeitures.

            As a result of adopting SFAS 123(R) on August 1, 2006, the Company's
            loss before income taxes and net loss for the three months ended
            October 31, 2006, is $153 higher than if it had continued to account
            for stock-based compensation under APB 25. Basic and diluted net
            loss per share for the three months ended October 31, 2006, are $
            0.006 higher, than if the Company had continued to account for
            share-based compensation under APB 25.

            Prior to August 1, 2006, the Company applied the intrinsic value
            method of accounting for stock options as prescribed by APB 25,
            whereby compensation expense is equal to the excess, if any, of the
            quoted market price of the stock over the exercise price at the
            grant date of the award.


                                      -10-

<PAGE>

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

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

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            The Company estimates the fair value of stock options granted using
            the Black-Scholes-Merton option-pricing model. The option-pricing
            model requires a number of assumptions, of which the most
            significant are, expected stock price volatility, and the expected
            option term. Expected volatility was calculated based upon actual
            historical stock price movements over the most recent periods ending
            on the grant date, equal to the expected option term. The expected
            option term represents the period that the Company's stock options
            are expected to be outstanding and was determined based on
            historical experience of similar options, giving consideration to
            the contractual terms of the stock options. The Company has
            historically not paid dividends and has no foreseeable plans to
            issue dividends. The risk-free interest rate is based on the yield
            from U.S. Treasury zero-coupon bonds with an equivalent term.

            The fair value of the Company's stock options granted to employees
            and directors for the three months ended October 31, 2006 and 2005
            was estimated using the following weighted average assumptions:

                           Three months ended
                               October 31,      Year ended
                           ------------------    July 31,
                               2006   2005         2006
                               ----   ----      ----------
                                Unaudited
                               -----------
Risk free interest             3.84%  3.84%        3.84%
Dividend yields                  0%     0%           0%
Volatility                     217%   217%         217%
Expected term (in years)         5      5            5
Forfeiture rate                  0%     0%           0%

            A summary of option activity under the Company's Stock Option as of
            October 31, 2006 and changes during the three months ended October
            31, 2006 are as follows:

<TABLE>
<CAPTION>
                                                                     Weighted-
                                                                     average
                                                                     remaining       Aggregate
                                  Number of    Weighted-average   contractual term   intrinsic
                                   options      exercise price       (in years)        value
                                  ----------   ----------------   ----------------   ---------
                                                            Unaudited
                                  ------------------------------------------------------------
<S>                                <C>               <C>                <C>             <C>
Outstanding at July 31, 2006       2,646,206         0.301
Granted                                   --
Exercised                                 --
Forfeited                                 --
                                   ---------
Outstanding at October 31, 2006    2,646,206         0.301              2.68             --
                                   =========         =====              ====            ===
Exercisable at October 31, 2006    2,531,788         0.301              2.67             --
                                   =========         =====              ====            ===
Vested and expected to vest        2,646,206         0.301              2.68             --
                                   =========         =====              ====            ===
</TABLE>


                                      -11-

<PAGE>

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

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

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            The aggregate intrinsic value in the table above represents the
            total intrinsic value (the difference between the Company's closing
            stock price on the last trading day of the three months ended
            October 31, 2006 and the exercise price, multiplied by the number of
            in-the-money options) that would have been received by the option
            holders had all option holders exercised their options on October
            31, 2006. This amount changes based on the fair market value of the
            Company's stock. As of October 31, 2006, there was $113 of total
            unrecognized compensation cost related to non-vested share-based
            compensation arrangements granted under the Company's stock option
            plans. That cost is expected to be recognized over a
            weighted-average period of 0.19 years. Total fair value of options
            vested for the three months ended October 31, 2006 was $312.

            The options granted to employees outstanding as of October 31, 2006
            have been separated into ranges of exercise prices, as follows:

<TABLE>
<CAPTION>
              Options
            outstanding   Weighted average   Weighted                 Weighted average
               as of          remaining       average                  exercise price
 Exercise   October 31,      contractual     exercise     Options      of exercisable
  price         2006       life (in years)     price    exercisable        options
---------   -----------   ----------------   --------   -----------   ----------------
<S>          <C>                <C>           <C>        <C>              <C>
$0.3-0.31    2,531,788          2.76          $0.301     2,486,698        $0.301
             ---------                        ------     ---------        ------
             2,531,788                        $0.301     2,486,698        $0.301
             =========                        ======     =========        ======
</TABLE>

            The pro-forma table below reflects the Company's stock based
            compensation expense, net income and basic and diluted earnings per
            share for the three months ended October 31, 2005 and for the year
            ended July 31, 2006, had the Company applied the fair value
            recognition provisions of SFAS 123, as follows:

<TABLE>
<CAPTION>
                                                          Three months ended     Year ended
                                                           October 31, 2005    July 31, 2006
                                                          ------------------   -------------
                                                               Unaudited
                                                          ------------------
<S>                                                           <C>               <C>
Net loss as reported                                          $       445       $     1,715
Add (deduct): stock-based compensation income (expense)
  recognized under APB 25                                               3               (27)
Add (deduct): stock-based compensation income (expense)
  determined under fair value method for all awards                  (256)            1,027
                                                              -----------       -----------
Pro forma net income                                                  704             2,715
                                                              ===========       ===========
Basic and diluted earnings per share, as reported             $      0.02       $      0.06
                                                              ===========       ===========
Pro forma basic and diluted earnings per share                $      0.03       $       0.1
                                                              ===========       ===========
Weighted average number of shares used in computing pro
  forma basic and diluted earnings per share                   27,582,114        27,662,795
                                                              ===========       ===========
</TABLE>


                                      -12-

<PAGE>

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

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

NOTE 3:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

            For purpose of pro-forma disclosures stock based compensation is
            amortized over the vesting period using the accelerated attribution
            method.

            Pro-forma compensation expense under SFAS 123, among other
            computational differences, does not consider potential pre-vesting
            forfeitures. Because of these differences, the pro-forma stock based
            compensation expense presented above for the prior three months
            period ended October 31, 2005 under SFAS 123 and the stock based
            compensation expense recognized during the current three months
            ended October 31, 2006 under SFAS 123(R) are not directly
            comparable.

            During the three months ended October 31, 2006 and the year ended
            July 31, 2006, the Company recognized stock-based compensation
            income related to employee stock options in the amount of $156 and
            $7, respectively, as follows:

                                             Three months ended     Year ended
                                              October 31, 2005    July 31, 2006
                                             ------------------   -------------
                                                  Unaudited
                                             ------------------
Research and development (income) expenses          $ 47              $(20)
General and administrative expenses                  109                27
                                                    ----              ----
Total stock-based compensation expenses             $156              $  7
                                                    ====              ====

NOTE 4:- COMMITMENTS AND CONTINGENCIES

      a.    The facilities and motor vehicles of the Company are rented under
            operating leases. Minimum rental commitments under the
            non-cancelable lease as of October 31, 2006 are for one additional
            year and amount to $17.

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

      c.    On September 7, 2004, the Board of Directors decided to terminate
            the employment of the Chief Executive Officer of the Company ("the
            Former CEO"). According to the Former CEO's employment agreement,
            the Former CEO is entitled to payments totaling approximately $78
            upon termination of employment with the Company. On December 21,
            2004, a claim against the Company was filed with to the Israeli
            Labor Court by the Former CEO for a payment of approximately $121
            (NIS 564 thousand) in respect of payments allegedly due to her. The
            Company has filed a statement of defense against the Former CEO's
            claim. The Company's management and its legal advisors are of the
            opinion that the Company has good defense arguments against the
            claim. In the year ended July 31, 2005, a provision in the amount of
            $100, in respect of net salary expenses was recorded under operating
            expenses, with respect to the Former CEO.


                                      -13-

<PAGE>

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

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

NOTE 4:- COMMITMENTS AND CONTINGENCIES (Cont.)

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

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

            3.    On November 4, 2004, the Board of Directors decided to demand
                  from the Former CEO to repay to the Company the amount of
                  withholding tax exposure totaling $538 to be paid by the
                  Company to the tax authorities, in respect of the exercise of
                  options. Based on a preliminary discussion with the income tax
                  authorities and consultations, the Company recorded a
                  liability to the tax authorities in the amount of $269. A
                  corresponding receivable from the Former CEO totaling $269 was
                  recorded and fully provided for as a doubtful account as of
                  July 31, 2004. Additional social security taxes liability
                  totaling $21, were recorded and provided for as of October 31,
                  2006.

                  The former CEO claims in a letter dated March 7, 2006, that
                  the warrants were issued free of all taxes and that if the tax
                  authorities will demand any sums then reimbursement shall be
                  demanded from the Company. The Company rejects these demands
                  in its response from March 23, 2006.

                  Furthermore, since the Company intends to continue its claim
                  and collect the withholding tax from the Former CEO,
                  management is of the opinion that it does not have a gross up
                  tax exposure with regard the exercise of the options.

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

            5.    The Company filed a counterclaim against its Former CEO in the
                  amount of approximately $2,023 (NIS 9,405 thousand) which
                  includes, inter alia, the issues described in (d)(1) through
                  (d)(4) above. The Company's management and its legal advisors
                  are of the opinion that the Company has a reasonably good
                  assertion in its counter claim.


                                      -14-

<PAGE>

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

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

NOTE 4:- COMMITMENTS AND CONTINGENCIES (Cont.)

            6.    The Company attorneys are negotiating with the Former CEO's
                  attorneys to reach a settlement on this dispute.

      e.    On July 11, 2005, the Former CEO submitted to the Company a letter
            claiming that the Company included in its Form 10-QSB filed on June
            24, 2005 slanderous allegations regarding the Former CEO. The Former
            CEO demanded a retraction and asserted damages of at least $23. The
            Company's management denies the claim. Accordingly, no provision was
            recorded in the accounts.

      f.    In March 2004, the Former CEO was granted 2,267,046 options to
            purchase a total of 2,267,046 shares of Common stock, out of which
            270,000 options were exercised into 249,859 shares of Common stock
            on a cashless basis. The total number of options to which the Former
            CEO is entitled should have been based on a formula that was
            determined in the agreement with the Former CEO. However, the number
            of options that were granted in March 2004 was incorrect. In
            November 2004, the Company's Board of Directors decided to amend the
            number of options granted to the Former CEO to a total of 2,042,551
            options to purchase a total of 2,042,551 shares of Common stock. The
            amended calculation is based on the formula determined in the
            agreement. The number of options and related compensation recorded
            in the year ended July 31, 2004 financial statements are based on
            the revised calculation. As of October 10, 2006, all of the
            remaining options expired.

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

                                   ----------


                                      -15-

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward Looking Statements - Cautionary Statements

This Form 10-QSB contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Specifically, all statements other than statements
of historical facts included in this report regarding Tissera, Inc.'s (the
"Company") financial position, business strategy and plans and objectives of the
Company's management for future operations are forward-looking statements. These
forward-looking statements are based on the beliefs of the Company's management,
as well as assumptions made by and information currently available to the
Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect," "intend," and words or phrases of similar
import, as they relate to the Company or Company management, are intended to
identify forward-looking statements. Such statements (the "cautionary
statements") reflect the current view of the Company's management with respect
to future events and are subject to risks, uncertainties, and assumptions
related to various factors including, without limitation, competitive factors,
general economic conditions, customer relations, relationships with vendors, the
interest rate environment, governmental regulation and supervision, seasonality,
product introductions and acceptance, technological change, changes in industry
practices, and one-time events. Although the Company believes that expectations
are reasonable, it can give no assurance that such expectations will prove to be
correct. Based upon changing conditions, should any one or more of these risks
or uncertainties materialize, or should any underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected, or intended. All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the applicable
cautionary statements. The Company does not assume any responsibility to
publicly update any of its forward-looking statements regardless whether factors
change as a result of new information, future events, or for any other reason.
The Company advises you to review any additional disclosures made in its 10-QSB,
8-K, and 10-KSB reports filed with the Commission.

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
approach involves harvesting embryonic mammalian tissue at the most appropriate
stage after which stem cells commit to becoming organ-specific precursor tissues
and transplanting them in target human organ systems. The optimal windows for
embryonic tissue transplantation were defined by Prof. Reisner's lab at the
Weizman Institute. We entered into a Research and License Agreement with Yeda,
whereby Yeda procures the performance of research at the Weizman Institute of
Science, under the supervision of Professor Reisner of the Department of
Immunology. We have a world wide license that shall expire in each country with
respect to each product at the later of (i) the expiration of the patents
covering such product in the country of sale, or (ii) 15 years from the date of
receipt of FDA New Drug Approval in the United States for such product, or the
equivalent in any other country in which the products are sold.

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

<PAGE>

Research and License Agreement

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

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

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

In addition, Yeda may terminate the Research Agreement if we are in breach
thereof and Yeda may, at its option, terminate the Research 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 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 Agreement that we have not
already commenced developing, then Yeda may provide us with notice of its
intention. Upon receipt of such notice, we will then have three months to submit
a product development program. If we do not submit such program, the license
will be terminated with respect to said given product.

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

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

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

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

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

<PAGE>

      o     October 7, 2013.

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

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

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

      o     with regard to the third year of research we paid an amount of US
            $900,000 of which $225,000 was paid on April 18, 2005; $225,000 was
            paid on July 11, 2005; $225,000 was paid on October 12, 2005 and
            $225,000 was paid on January 9, 2006.

      o     pursuant to the third addendum of the Research Agreement dated April
            11, 2006, with regard to the fourth year of research, we committed
            to pay an amount of US $600,000 of which $150,000 was paid on May 2,
            2006; $150,000 was paid on July 19, 2006; and $150,000 was paid on
            October 9, 2006. Further, the termination for the research period
            was extended from April 10, 2006 to April 9, 2007.

We have also agreed that within one year from the date of the Research
Agreement, we will submit a development program to Yeda for its approval. The
Company has applied to Yeda for the deferral of the submission of this program
to September 2005, and Yeda has given its consent for the deferral. The
September 2005 product development plan has been submitted to Yeda, and has been
followed by progress reports submitted in December 2005 and June 2006. We
further undertook to use our best efforts to commercialize the licensed
products. As part of those efforts, the research period has been extended for
one more year, to allow for further progress in our preclinical experiments both
in our pancreatic and liver-spleen applications. Our pancreatic application has
reached the large animal experimental phase, while our liver-spleen application
is still in its small animal experimental phase. We also agreed to pay Yeda a
license fee as follows:

      o     $50,000 per year commencing from the end of the license period,
            which has been extended until April 9, 2007;

      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 for the Three Months Ended October 31, 2006 Compared to
the Three Months Ended October 31, 2005

Revenues and Cost of Goods Sold

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

<PAGE>

Operating Expenses

Operating expenses for the quarter ended October 31, 2006 amounted to $528,000
compared to 461,000 for the quarter ended October 31, 2005. The increase in
operation expenses is attributed to the implementation of SFAS No. 123 in which
the Company accounted for its employee stock option under the fair value method
creating an expense of $156,000. Without this expense relating to stock options,
the Company operating expenses for the quarter ended October 31, 2006 would have
decreased when compared to the Company's operating expenses for the quarter
ended October 31, 2005.

The R&D expenses amounted to $254,000 in the quarter ended October 31. 2006
compared to $296,000 in the quarter ended October 31. 2005. This decrease in the
R&D expenses is attributed to a decrease in expenses related to Yeda (see Item 2
- Research Agreement) which decreased from $225,000 in the quarter ended October
31, 2005 to $150,000 in the quarter ended October 31, 2006. The Company
implemented SFAS No. 123 in which the Company accounted for its employee stock
option under the fair value method, thus creating an expense of $47,000 in the
quarter ended October 31, 2006 compared to $0 for the quarter ended October 31,
2005.

The Company had general and administrative expenses of $274,000 in the quarter
ended October 31, 2006 compared to $165,000 in the quarter ending October 31,
2005. The Company kept its general and administrative expenses in both quarters
on the same level; the increase is attributed to the implementation of SFAS No.
123 which created an expense of $109,000 in the quarter ended October 31, 2006
compared to $(3,000) for the quarter ended October 31, 2005.

Financial Income

We had a net financial income in the amount of $19,000 for the quarter ended
October 31, 2005 compared to net financial expenses of $2,000 for the quarter
ended October 31, 2006. The Company had incurred financial expenses of $10,000
due to a devaluation of the US dollar against the NIS which finally generated a
net financial expense of $2,000. In addition, the Company has a decreased
financial income due to a decrease in fund available for investment because the
cash has been used to finance its research and development activities. The
Company has invested its funds in bank deposits that bear interest rates of
approximately 4.0% per annum.

Taxes on Income

We had a tax expense amounting to $3,000 in the quarter ended October 31, 2006
and October 31, 2005. The tax expense is resulting from tax liability of our
wholly owned subsidiary Tissera Ltd. Our company has an agreement with our
subsidiary to which we will provide services related to our Research and
Development activities. We will reimburse Tissera Ltd. for expenses on a cost
plus 7% basis which creates a taxable income in our subsidiary.

Net Loss

As a result of the above, we incurred a net loss of $533,000 for the period
ending October 31, 2006, compared to a net loss of $445,000 for the period
ending October 31, 2005.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Our cash equivalents and short term deposits were $617,000 as of October 31,
2006, compared to $955,000 as of July 31, 2005. This decrease in cash
equivalents and short term deposits is attributed to the Company's need to
finance its development activities from its cash equivalents and short term
deposits. We had a working capital of $27,000 as of October 31, 2006, compared
to $499,000 as of July 31, 2006. We plan to continue to consume cash in our
research and development activities by payments of salaries, payments for
services received from Yeda and other costs. We also plan to continue financing
our operations through a combination of private placements, stock issuances,
debt issuances, mutual developments with possible milestone license payments and
research and development programs of which there is no guarantee. 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.

Due to our being a development stage company and not having generated revenues,
in the consolidated financial statements for the period ended October 31, 2006
we included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our consolidated financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure.

The continuation of our business is dependent upon us raising additional
financial support. The issuance of additional equity securities by us could
result in a significant dilution in the equity interests of our current
stockholders.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Going Concern

Our quarter financial statements have been prepared on the going concern basis,
which assumes the realization of assets and liquidation of liabilities in the
normal course of operations. The financial statements have been prepared
assuming we will continue as a going concern. However, certain conditions exist
which raise doubt about our ability to continue as a going concern. We have
suffered recurring losses from operations and have accumulated deficit during
the development stage of approximately $28,865,000 since inception through the
period ended October 31, 2006.

Item 3. Controls and Procedures

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

<PAGE>

Part II: OTHER INFORMATION

Item 1. 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 December 21, 2004, Dr. Rabenou, our former CEO and a director,
            filed claim in the District Labor Court located in Tel Aviv Israel
            ("Labor Court") against the Company alleging that the Company owed
            Dr. Rabenou a sum of NIS 564,140 (approximately $121,000) pursuant
            to the terms of her employment agreement. This claim remains
            pending, and the Company intends to continue its current defense
            efforts with respect to such claim. In addition, the Company, filed
            a counterclaim against Dr. Rabenou in the Labor Court based on
            damages incurred to the Company pursuant to certain of Dr. Rabenou's
            actions or omissions, during her tenure as the Company's CEO. The
            counterclaim seeks damages against Dr. Rabenou in the amount of NIS
            9,405,491 (approximately $2,023,000). These damages are based
            primarily on certain actions taken by Dr. Rabenou as follows: (i)
            the issuance of an unauthorized bonus to Dr. Rabenou while she was
            CEO in the amount of $110,000 upon completion of the private
            offering in the amount of $5,500,000 in March 2004;; (ii) the
            issuance of 280,000 shares of common stock to Pini Rabenou, the
            brother of Dr. Rabenou, for which the Company did not receive any
            discernable consideration; (iii) the failure to withhold Israeli
            income taxes with respect to the exercise of options by Dr. Rabenou;
            and (iv) the issuance of shares to Biogreen Ltd. as more fully
            described below. On January 15, 2004, when Dr. Rabenou recommended
            the issuance of Company shares to number of specified entities and
            individuals, including a company known as BioGreen Ltd.
            ("BioGreen"), to which the Company issued 397,000 shares (the
            "BioGreen Shares"). The issuance of the BioGreen Shares gave rise to
            a Company expense of $833,700. After Dr. Rabenou resigned as CEO,
            the Company commenced an internal investigation into all corporate
            actions taken during Dr. Rabenou's tenure, including the BioGreen
            matter. The Company's management attempted, unsuccessfully, to
            identify the specific services that served as the basis for
            BioGreen's compensation, and Dr. Rabenou refused to cooperate with
            the Company's investigation. Notwithstanding, in response to the
            Company's counterclaim, Dr. Rabenou filed a reply brief within which
            she denied our claims and asserted that she assigned her right to
            the BioGreen Shares to an unnamed offshore company incorporated in
            the Bahamas (that the Company believes is BioGreen), and asserting a
            number of new defenses and mitigating factors, which were not
            disclosed either during or immediately subsequent to the January 15,
            2004 Board of Directors Meeting. The Company initially described the
            above litigation proceedings, within its Form 10-QSB filed for the
            quarter ended April 30, 2005. Subsequent to the filing of such Form
            10-QSB, Dr. Rabenou's legal counsel: (a) communicated to the Company
            that it believed that the statements in such 10-QSB constituted
            libel; (b) threatened legal action against the Company if such
            statements were not withdrawn; and (c) claimed damages of
            approximately $23,000 related to such alleged libel. The Company,
            based on the opinion of its legal advisors, does not intend to
            retract any of its public statements regarding the above matters.
            The Company attorneys are negotiating with Rabenou's attorneys to
            reach a settlement on this dispute of which there is no guarantee.

<PAGE>

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

(a)   Exhibit Description

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

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

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report, for the Quarter ended October 31, 2005 has been signed below
by the following person on behalf of the Registrant and in the capacity and on
the date indicated.


                                        TISSERA, INC.


Dated: December 14, 2006                By: /s/ Amos Eiran
                                            ------------------------------------
                                            Amos Eiran
                                            Chief Executive Officer


Dated: December 14, 2006                By: /s/ Alex Werber
                                            ------------------------------------
                                            Alex Werber
                                            Chief Financial Officer