**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**x**
**      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE**

**ACT      OF 1934**

**FOR      THE QUARTERLY PERIOD ENDED APRIL 30, 2008**

** ̈**
**      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      ACT**

**OF      1934**

**FOR      THE TRANSITION FROM _______ TO ________.**

*COMMISSION      FILE NUMBER 000-32801*

**TISSERA,      INC. **
** **

----

| **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

|  Large                accelerated filer o | Accelerated                filer o         |
|------------------------------------------------|--------------------------------------------|
|                                           |                                       |
| Non-accelerated                filer o         | Smaller                reporting company T |

**APPLICABLE      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS**

**DURING      THE PRECEDING FIVE YEARS**

**APPLICABLE      ONLY TO CORPORATE ISSUERS**

----

**TISSERA,      INC.**

**APRIL      30, 2008 QUARTERLY REPORT ON FORM 10-Q**

**TABLE      OF CONTENTS **

|                                                                                                  | **Page** |
|-------------------------------------------------------------------------------------------------------|----------|
|                                                                                                  |     |
| **PART                I - FINANCIAL INFORMATION**                                                |     |
|                                                                                                  |     |
| Item                1. Financial Statements                                                           | 3        |
| Item                2. Management’s Discussion and Analysis or Plan of                Operation | 20       |
| Item                3. Controls and Procedures                                                        | 26       |
|                                                                                                  |     |
| **PART                II - OTHER INFORMATION**                                                        |     |
|                                                                                                  |     |
| Item                1. Legal Proceedings                                                              | 27       |
| Item                1A. Risk Factors                                                                  |  27 |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds     |  27 |
| Item                3. Defaults Upon Senior Securities                                                |  27 |
| Item                4. Submission of Matters to a Vote of Security Holders                            |  27 |
| Item                5. Other Information                                                              | 27       |
| Item                6. Exhibits                                                                       | 27       |
| **SIGNATURES**                                                                                        | 28       |

----

**PART      I**

**FINANCIAL      INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS\**

**TISSERA      INC.**

**(A      development stage company)**

**INTERIM      CONSOLIDATED FINANCIAL STATEMENTS**

**AS      OF APRIL 30, 2008**

**IN      U.S. DOLLARS **

**UNAUDITED**

**INDEX**

|                                                                          | **Page**                       |
|-------------------------------------------------------------------------------|--------------------------------|
|                                                                          |                           |
| **Consolidated                Balance Sheets**                                | **4**                          |
|                                                                          |                           |
| **Consolidated                Statements of Operations**                      | **5**                          |
|                                                                          |                           |
| **Statements                of Changes in Stockholders' Equity (Deficiency)** | **6 -                7**  |
|                                                                          |                           |
| **Consolidated                Statements of Cash Flows**                      | **8**                          |
|                                                                          |                           |
| **Notes                to Consolidated Financial Statements**                 | **9 -                19** |

**-      - - - - - - - - - -**

----

**TISSERA      INC.**

**(A      development stage company)**

**CONSOLIDATED      BALANCE SHEETS **

----

**U.S.      dollars in thousands (except share and per share data)**

|                                                                                                                                                                                                                                                                                                     |   | **April 30,** |    | **July 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                     |   | **2008**           |    | **2007**          |   |
|                                                                                                                                                                                                                                                                                                     |   | **Unaudited**      |    |              |   |
| ASSETS                                                                                                                                                                                                                                                                                                   |   |               |    |              |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |
| CURRENT                ASSETS:                                                                                                                                                                                                                                                                           |   |               |    |              |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                                 |   | $                  | 82      |              | $      | 999 |   |
| Marketable                securities                                                                                                                                                                                                                                                                     |   |               | 74      |              |   | - |   |
| Accounts                receivable and prepaid expenses                                                                                                                                                                                                                                                  |   |               | 24      |              |   | 221 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                current assets                                                                                                                                                                                                                                                                      |   |               | 180     |              |   | 1,220 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| RESTRICTED                CASH                                                                                                                                                                                                                                                                           |   |               | 7       |              |   | 5 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| SEVERANCE                PAY FUND                                                                                                                                                                                                                                                                        |   |               | 75      |              |   | 47 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| PROPERTY                AND EQUIPMENT, NET                                                                                                                                                                                                                                                               |   |               | 5       |              |   | 7 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| LONG-TERM                PREPAID EXPENSES                                                                                                                                                                                                                                                                |   |               | 5       |              |   | 4 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                assets                                                                                                                                                                                                                                                                              |   | $                  | 272     |              | $      | 1,283 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY (DEFICIENCY)                                                                                                                                                                                                                                         |   |               |    |              |   |   |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| CURRENT                LIABILITIES:                                                                                                                                                                                                                                                                      |   |               |    |              |   |   |   |
| Trade                payables                                                                                                                                                                                                                                                                            |   | $                  | 11      |              | $      | 12 |   |
| Other                accounts payable and accrued expenses                                                                                                                                                                                                                                               |   |               | 196     |              |   | 611 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                current liabilities                                                                                                                                                                                                                                                                 |   |               | 207     |              |   | 623 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| ACCRUED                SEVERANCE PAY                                                                                                                                                                                                                                                                     |   |               | 100     |              |   | 64 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                liabilities                                                                                                                                                                                                                                                                         |   |               | 307     |              |   | 687 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| STOCKHOLDERS'                EQUITY (DEFICIENCY):                                                                                                                                                                                                                                                        |   |               |    |              |   |   |   |
| Stock                capital -                                                                                                                                                                                                                                                                      |   |               |    |              |   |   |   |
| Common                stock of $ 0.0001 par value each - Authorized: 100,000,000 shares at                April 30, 2008 and July 31, 2007; Issued and outstanding: 45,591,809                and                44,314,332 shares at April 30, 2008 and July 31, 2007,                respectively |   |               | 5       |              |   | 5 |   |
| Preferred                stock of $ 0.0001 par value each - Authorized: 20,000,000 shares at                April 30, 2008 and July 31, 2007; Issued and outstanding: 0 shares                at                April 30, 2008 and July 31, 2007                                               |   |               | -       |              |   | - |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                |   |               | 30,788  |              |   | 30,788 |   |
| Deficit                accumulated during the development stage                                                                                                                                                                                                                                          |   |               | (30,828 | )                 |   | (30,197 | ) |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                stockholders' equity (deficiency)                                                                                                                                                                                                                                                   |   |               | (35     | )                 |   | 596 |   |
|                                                                                                                                                                                                                                                                                                     |   |               |    |              |   |   |   |
| Total                liabilities and stockholders' equity (deficiency)                                                                                                                                                                                                                                   |   | $                  | 272     |              | $      | 1,283 |   |

----

**TISSERA      INC.**

**(A      development stage company)**

**CONSOLIDATED**
**STATEMENTS      OF OPERATIONS **

----

**U.S.      dollars in thousands (except share and per share data)**

|                                                                                                                                   |   | **Nine months ended****April 30, ** |       | **Three months ended****April 30,** |   | **Year endedJuly 31,** |   | **From May 31,2000 (date ofinception)through****April 30,** |       |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|------------|----------------------------------------------------|--------|----------------------------------|--------|--------------------------------------------------------------------------------------|------------|
|                                                                                                                                   |   | **2008**                                                |       | **2007**                                           |   | **2008**                         |   | **2007**                                                                             |       | **2007** |   | **2008** |   |
|                                                                                                                                   |   | **Unaudited**                                           |       |                                               |   | **Unaudited**                    |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |
| Operating                expenses (income)                                                                                             |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |
| Research                and development *)                                                                                             |   | $                                                       | 476        |                                               | $      | 898                              |   | $                                                                                    | 159        |   | $ | 245 |   | $ | 1,073 |   | $ | 16,613 |   |
| General                and administrative **)                                                                                          |   |                                                    | 115        |                                               |   | 624                              |   |                                                                                 | (288       | ) |   | 147 |   |   | 812 |   |   | 14,180 |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                   |   |                                                    | 591        |                                               |   | 1,522                            |   |                                                                                 | (129       | ) |   | 392 |   |   | 1,885 |   |   | 30,793 |   |
| Financial                expenses (income), net                                                                                        |   |                                                    | 40         |                                               |   | (4                               | )      |                                                                                 | (1         | ) |   | 1 |   |   | (37 | ) |   | (122 | ) |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Loss                (income) from continuing operations before income taxes                                                            |   |                                                    | 631        |                                               |   | 1,518                            |   |                                                                                 | (130       | ) |   | 393 |   |   | 1,848 |   |   | 30,671 |   |
| Income                taxes (tax benfit)                                                                                               |   |                                                    | -          |                                               |   | 7                                |   |                                                                                 | (7         | ) |   | 2 |   |   | 17 |   |   | 65 |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Loss                (income) from continuing operations                                                                                |   |                                                    | 631        |                                               |   | 1,525                            |   |                                                                                 | (137       | ) |   | 395 |   |   | 1,865 |   |   | 30,736 |   |
| Loss                from discontinued operations                                                                                       |   |                                                    | -          |                                               |   | -                                |   |                                                                                 | -          |   |   | - |   |   | - |   |   | 92 |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Net                loss (income)                                                                                                       |   | $                                                       | 631        |                                               | $      | 1,525                            |   | $                                                                                    | (137       | ) | $ | 395 |   | $ | 1,865 |   | $ | 30,828 |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net loss (earnings) per share                                                                         |   | $                                                       | 0.014      |                                               | $      | 0.04                             |   | $                                                                                    | (0.003     | ) | $ | 0.009 |   | $ | 0.05 |   |   |   |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of shares used in computing basic net loss (earnings)                per                share   |   |                                                    | 44,964,278 |                                               |   | 35,248,398                       |   |                                                                                 | 45,406,824 |   |   | 44,314,352 |   |   | 37,533,510 |   |   |   |   |
|                                                                                                                                   |   |                                                    |       |                                               |   |                             |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |
| Weighted                average number of shares used in computing diluted net loss (earnings)                per                share |   |                                                    | 44,964,278 |                                               |   | 35,248,398                       |   |                                                                                 | 52,835,723 |   |   | 44,314,352 |   |   | 37,533,510 |   |   |   |   |

| *) | Including                expenses related to options granted to employees and warrants granted                to                Yeda and to service providers in the amount of $ 0, $ 268, $ 0 and                $ 28 and $ 280 for the nine months ended April 30, 2008 and                2007, three months ended April 30, 2008 and 2007 and for the year                ended                July 31, 2007, respectively. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **) | Including                expenses related to warrants, options and shares granted to service                providers, employees and directors and compensation to investors                in the                amount of $ 83, $ 141, $ 0 and $ 5 and $ 150 for the nine months                ended April 30, 2008 and 2007, for the three months ended April 30,                2008 and 2007 and for the year ended July 31, 2007, respectively. In                addition, including the cancellation of provisions in an amount                aggregating to about $ 430 for the nine-month period ended                April 30, 2008 (see Note 4d). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA      INC.**

**(A      development stage company)**

**STATEMENTS      OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) **

----

**U.S.      dollars in thousands (except share data)**

|                                                                                                                                        |   |                   |       |        |   |            |           |             |    | **Deficit**         |   |              |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|------------|-------------|--------|-----------------|----------------|------------------|---------|---------------------|--------|-------------------|--------|
|                                                                                                                                        |   |                   |       |        |   |            |           |             |    | **accumulated**     |   | **Total**         |   |
|                                                                                                                                        |   |                   |       |        |   | **Additional**  |           | **Deferred**     |    | **during the** |   | **stockholders'** |   |
|                                                                                                                                        |   | **Stock capital** |       | **paid-in** |   | **stock-based** |           | **development**  |    | **equity**          |   |
|                                                                                                                                        |   | **Number**             |       | **Amount**  |   | **capital**     |           | **compensation** |    | **stage**           |   | **(deficiency)**  |   |
|                                                                                                                                        |   |                   |       |        |   |            |           |             |    |                |   |              |   |
| Balance                as of May 31, 2000 (date of inception)                                                                               |   |                   | -          |        | $      | -               |           | $                | -       |                | $      | -                 |   | $ | - |   | $ | - |   |
|                                                                                                                                        |   |                   |       |        |   |            |           |             |    |                |   |              |   |   |   |   |   |   |   |
| Stock                issued for cash on May 31, 2000                                                                                        |   |                   | 15,036,000 |        |   | 2               |           |             | 8       |                |   | -                 |   |   | - |   |   | 10 |   |
| Net                loss                                                                                                                     |   |                   | -          |        |   | -               |           |             | -       |                |   | -                 |   |   | (5 | ) |   | (5 | ) |
|                                                                                                                                        |   |                   |       |        |   |            |           |             |    |                |   |              |   |   |   |   |   |   |   |
| Balance                as of July 31, 2000                                                                                                  |   |                   | 15,036,000 |        |   | 2               |           |             | 8       |                |   | -                 |   |   | (5 | ) |   | 5 |   |
|                                                                                                                                        |   |                   |       |        |   |            |           |             |    |                |   |              |   |   |   |   |   |   |   |
| 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 in cash issuance                expenses                            |   |                   | 1,767,200  |        |   |  -         | *)        |             | 2,033   |                |   | -                 |   |   | - |   |   | 2,033 |   |
| Stock                issued for cash related to PPM2, net of $ 517 in 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 |   |

| *) | Represents                an amount lower than $ 1. |
|----|----------------------------------------------------------|

----

**TISSERA      INC.**

**(A      development stage company)**

**STATEMENTS      OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)**

----

**U.S.      dollars in thousands (except share data)**

|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   | **Deficit**                   |   |              |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|-------------|--------|-----------------|----------|------------------|--------|-------------------------------|--------|-------------------|--------|
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   | **accumulated**               |   | **Total**         |   |
|                                                                                                                                                          |   |                             |       |        |   | **Additional**  |     | **Deferred**     |   | **during                the** |   | **stockholders'** |   |
|                                                                                                                                                          |   | **Stock                capital** |       | **paid-in** |   | **stock-based** |     | **development**  |   | **equity**                    |   |
|                                                                                                                                                          |   | **Number**                       |       | **Amount**  |   | **capital**     |     | **compensation** |   | **stage**                     |   | **(deficiency)**  |   |
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   |                          |   |              |   |
| Balance                as of August 1, 2006                                                                                                                   |   |                             | 27,814,332 |        |   | 3               |     |             | 28,839 |                          |   | (4                | )      |   | (28,332 | ) |   | 506 |   |
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   |                          |   |              |   |   |   |   |   |   |   |
| Reclassification                of deferred stock-based compensation into additional paid-in capital                upon                adoption of SFAS 123R |   |                             | -          |        |   | -               |     |             | (4     | )                             |   | 4                 |   |   | - |   |   | - |   |
| Issuance                of shares and warrants, net                                                                                                           |   |                             | 16,500,000 |        |   | 2               |     |             | 1,422  |                          |   | -                 |   |   | - |   |   | 1,424 |   |
| Shares                granted to service providers                                                                                                            |   |                             | -          |        |   | -               |     |             | 110    |                          |   | -                 |   |   | - |   |   | 110 |   |
| Stock-based                compensation related to options granted to employees and                directors                                                  |   |                             | -          |        |   | -               |     |             | 271    |                          |   | -                 |   |   | - |   |   | 271 |   |
| Warrants                granted to Yeda                                                                                                                       |   |                             | -          |        |   | -               |     |             | 150    |                          |   | -                 |   |   | - |   |   | 150 |   |
| Net                loss                                                                                                                                       |   |                             | -          |        |   | -               |     |             | -      |                          |   | -                 |   |   | (1,865 | ) |   | (1,865 | ) |
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   |                          |   |              |   |   |   |   |   |   |   |
| Balance                as of July 31, 2007                                                                                                                    |   |                             | 44,314,332 |        |   | 5               |     |             | 30,788 |                          |   | -                 |   |   | (30,197 | ) |   | 596 |   |
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   |                          |   |              |   |   |   |   |   |   |   |
| Issuance                of shares granted to service providers in previous year                                                                               |   |                             | 1,000,000  |        |   | -               | *)  |             | -      |                          |   | -                 |   |   | - |   |   | - |   |
| Exercise                of options                                                                                                                            |   |                             | 277,477    |        |   |  -         | *)  |             | -      |                          |   | -                 |   |   | - |   |   | - |   |
| Net                loss                                                                                                                                       |   |                             | -          |        |   | -               |     |             | -      |                          |   | -                 |   |   | (631 | ) |   | (631 | ) |
|                                                                                                                                                          |   |                             |       |        |   |            |     |             |   |                          |   |              |   |   |   |   |   |   |   |
| Balance                as of April 30, 2008 (unaudited)                                                                                                       |   |                             | 45,591,809 |        | $      | 5               |     | $                | 30,788 |                          | $      | -                 |   | $ | (30,828 | ) | $ | (35 | ) |

| *) | Represents                an amount lower than $ 1. |
|----|----------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

**CONSOLIDATED**
**STATEMENTS      OF CASH FLOWS**

----

**U.S.      dollars in thousands**

|                                                                                                                                     |   | **Nine months ended ****April 30,** |   | **Year endedJuly 31,** |   | **From May 31,2000 (date ofinception)through****April 30,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|----------------------------------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                                                                     |   | **2008**                                                |   | **2007**                         |   | **2007**                                                                             |   | **2008** |   |
|                                                                                                                                     |   | **Unaudited**                                           |   |                             |   | **Unaudited**                                                                        |   |
| Cash                  flows from operating activities:                                                                                   |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Net                  loss                                                                                                                |   | $                                                       | (631   | )                                | $      | (1,525                                                                               | )      | $ | (1,865 | ) | $ | (30,828 | ) |
| Adjustments                  required to reconcile net loss to net cash used in continuing operating                  activities:        |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Depreciation                                                                                                                             |   |                                                    | 2      |                             |   | 6                                                                                    |   |   | 6 |   |   | 33 |   |
| Expenses                  related to warrants granted to Yeda and to service                  providers                                  |   |                                                    | -      |                             |   | 143                                                                                  |   |   | 150 |   |   | 11,197 |   |
| Expenses                  related to options granted to employees and directors                                                          |   |                                                    | -      |                             |   | 266                                                                                  |   |   | 271 |   |   | 1,604 |   |
| Expenses                  related to shares granted to service providers and compensation                  to                  investors |   |                                                    | 83     |                             |   | -                                                                                    |   |   | 9 |   |   | 9,438 |   |
| Interest                  accrued on short-term deposit                                                                                  |   |                                                    | -      |                             |   | 17                                                                                   |   |   | - |   |   | (17 | ) |
| Decrease                  (increase) in accounts receivable and prepaid expenses                                                         |   |                                                    | 113    |                             |   | 29                                                                                   |   |   | 54 |   |   | (7 | ) |
| Increase                  (decrease) in trade payables                                                                                   |   |                                                    | (1     | )                                |   | 12                                                                                   |   |   | 8 |   |   | 11 |   |
| Increase                  (decrease) in other accounts payable and accrued expenses                                                      |   |                                                    | (415   | )                                |   | (28                                                                                  | )      |   | (15 | ) |   | 196 |   |
| Increase                  in accrued severance pay, net                                                                                  |   |                                                    | 8      |                             |   | 5                                                                                    |   |   | 6 |   |   | 25 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Net                  cash used in continuing operating activities                                                                        |   |                                                    | (841   | )                                |   | (1,075                                                                               | )      |   | (1,376 | ) |   | (8,348 | ) |
| Net                  cash provided by discontinued operating activities                                                                  |   |                                                    | -      |                             |   | -                                                                                    |   |   | - |   |   | 75 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Total                  net cash used in operating activities                                                                             |   |                                                    | (841   | )                                |   | (1,075                                                                               | )      |   | (1,406 | ) |   | (8,273 | ) |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Cash                  flows from investing activities:                                                                                   |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Purchase                  of marketable securities, net                                                                                  |   |                                                    | (74    | )                                |   | -                                                                                    |   |   | - |   |   | (74 | ) |
| Short-term                  deposit                                                                                                      |   |                                                    | -      |                             |   | 827                                                                                  |   |   | 844 |   |   | 17 |   |
| Sale                  of property and equipment                                                                                          |   |                                                    | -      |                             |   | -                                                                                    |   |   | - |   |   | 9 |   |
| Purchase                  of property and equipment                                                                                      |   |                                                    | -      |                             |   | -                                                                                    |   |   | - |   |   | (47 | ) |
| Restricted                  cash                                                                                                         |   |                                                    | -      |                             |   | (1                                                                                   | )      |   | - |   |   | (5 | ) |
| Lease                  deposits                                                                                                          |   |                                                    | -      |                             |   | -                                                                                    |   |   | (4 | ) |   | (4 | ) |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Net                  cash provided by (used in) continuing investing activities                                                          |   |                                                    | (74    | )                                |   | 826                                                                                  |   |   | 840 |   |   | (104 | ) |
| Net                  cash used in discontinued investing activities                                                                      |   |                                                    | -      |                             |   | -                                                                                    |   |   | - |   |   | (15 | ) |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Total                  net cash provided by (used in) investing activities                                                               |   |                                                    | (74    | )                                |   | 826                                                                                  |   |   | 840 |   |   | (119 | ) |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Cash                  flows from financing activities:                                                                                   |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Restricted                  cash                                                                                                         |   |                                                    | (2     | )                                |   |                                                                                 |   |   | - |   |   | (2 | ) |
| Issuance                  of shares and warrants, net                                                                                    |   |                                                    | -      |                             |   | 1,424                                                                                |   |   | 1,424 |   |   | 8,441 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Net                  cash provided by (used in) continuing financing activities                                                          |   |                                                    | (2     | )                                |   | 1,424                                                                                |   |   | 1,424 |   |   | 8,439 |   |
| Net                  cash provided by discontinued financing activities                                                                  |   |                                                    | -      |                             |   | -                                                                                    |   |   | - |   |   | 35 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Total                  net cash provided by (used in) financing activities                                                               |   |                                                    | (2     | )                                |   | 1,424                                                                                |   |   | 1,424 |   |   | 8,474 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Increase                  (decrease) in cash and cash equivalents                                                                        |   |                                                    | (917   | )                                |   | 1,175                                                                                |   |   | 888 |   |   | 82 |   |
| Cash                  and cash equivalents at beginning of period                                                                        |   |                                                    | 999    |                             |   | 111                                                                                  |   |   | 111 |   |   | - |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at end of period                                                                              |   | $                                                       | 82     |                             | $      | 1,286                                                                                |   | $ | 999 |   |   | 82 |   |
|                                                                                                                                     |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Non-cash                  activity:                                                                                                      |   |                                                    |   |                             |   |                                                                                 |   |   |   |   |   |   |   |
| Prepaid                  expense                                                                                                         |   | $                                                       | -      |                             | $      | -                                                                                    |   | $ | 101 |   |   | 101 |   |

----

**TISSERA        INC.**

**(A        development stage company)**

| **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. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                1:-** | **GENERAL                (Cont.)** |
|-----------------------------|------------------------------------|

|   | c. | Going                concern considerations: |
|--------|----|----------------------------------------------|

|   | d. | Risk                factors: |
|--------|----|------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                2:-** | **RESEARCH                AND LICENSE AGREEMENT** |
|-----------------------------|---------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

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

| **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 d                below. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Use                of estimates: |
|--------|----|----------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                3:-** | **SIGNIFICANT                ACCOUNTING POLICIES                (Cont.)** |
|-----------------------------|---------------------------------------------------------------------------|

|   | c. | Marketable                securities: |
|--------|----|---------------------------------------|

|   | d. | In                July 2006, the FASB issued FASB Interpretation 48, "Accounting for                Uncertainty in Income Taxes" ("FIN 48"). FIN 48 defines the threshold                for                recognizing the benefits of tax return positions in the financial                statements as "more-likely-than-not" to be sustained by the taxing                authority. The recently issued literature also provides guidance                on                derecognition, measurement and classification of income tax uncertainties,                along with any related interest and penalties. FIN 48 also includes                guidance concerning accounting for income tax uncertainties in interim                periods and increases the level of disclosures associated with any                income                tax uncertainties. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA      INC.**

**(A      development stage company)**

| **NOTE                3:-** | **SIGNIFICANT                ACCOUNTING POLICIES                (Cont.)** |
|-----------------------------|---------------------------------------------------------------------------|

|   | e. | 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). |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Shares      and options to employees and directors*

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                3:-** | **SIGNIFICANT                ACCOUNTING POLICIES                (Cont.)** |
|-----------------------------|---------------------------------------------------------------------------|

| Risk                  free interest       |   |   | 3.84 | %      |
|-------------------------------------------|--------|--------|------|--------|
| Dividend                  yields          |   |   | 0    | %      |
| Volatility                                |   |   | 217  | %      |
| Expected                  term (in years) |   |   | 5    |   |
| Forfeiture                  rate          |   |   | 0    | %      |

|                                                         |   | **Number of****options** |          | **Weighted-****average****exercise****price** |   | **Weighted-****average****remaining****contractual****term****(in years)** |   | **Aggregate****intrinsic****value *)** |      |
|--------------------------------------------------------------|--------|-------------------------------|---------------|-----------------------------------------------|--------|---------------------------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                         |   | **Unaudited**                 |          |
|                                                         |   |                          |          |                                          |   |                                                                            |   |                                        |      |
| **Outstanding                at August 1, 2007**             |   |                          | **2,646,206** |                                          | **$**  | **0.301**                                                                       |   |                                        |      |   |   |   |   |
| **Granted**                                                  |   |                          | **-**         |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
| **Exercised**                                                |   |                          | **-**         |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
| **Forfeited**                                                |   |                          | **-**         |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
|                                                         |   |                          |          |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
| **Outstanding                at April 30, 2008 (unaudited)** |   |                          | **2,646,206** |                                          | **$**  | **0.301**                                                                       |   |                                        | **1.175** |   |   | **-** |   |
|                                                         |   |                          |          |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
| **Exercisable                at April 30, 2008 (unaudited)** |   |                          | **2,646,206** |                                          | **$**  | **0.301**                                                                       |   |                                        | **1.175** |   |   | **-** |   |
|                                                         |   |                          |          |                                          |   |                                                                            |   |                                        |      |   |   |   |   |
| **Vested                and expected to vest**               |   |                          | **2,646,206** |                                          | **$**  | **0.301**                                                                       |   |                                        | **1.175** |   |   | **-** |   |

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                3:-** | **SIGNIFICANT                ACCOUNTING POLICIES                (Cont.)** |
|-----------------------------|---------------------------------------------------------------------------|

*Shares      and warrants to service providers*

|   | a) | The                Company granted in prior years 2,429,722 warrants to purchase Common                stock                at an exercise price of $ 0.0001 per share, 150,000 warrants to                purchase Common stock at an exercise price of $ 0.01 per share, 600,000                warrants to purchase 600,000 shares of Common stock at an exercise                price                of $ 1 per share and 2,777,000 shares of Common stock at no                consideration. The warrants and shares were granted to service providers                and to advisory board members, in exchange for research and development                services and general and administrative services. 3,040,984 warrants                are                fully vested as of April 30, 2008. In addition, as of April 30,                2008 and 2007, there were 277,477 warrant, respectively exercised                into                shares of Common stock. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | The                Company granted 2,578,961 warrants to Yeda (see Note 2), out of which                955,839 and 54,180 were issued during the year ended July 31, 2007                due to                issuance of Common stock on December 28, 2006 and October 9, 2007                (see c)                below), respectively. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | On                June 26, 2007, the Company signed an agreement with a consultant                ("the                Consultant"), effective July 1, 2007, according to which the Consultant                will provide the Company consulting and advisory services in connection                with strategic business planning, corporate finance, investor support,                broker relations and related matters ("the Services"), for one year                commencing July 1, 2007. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                3:-** | **SIGNIFICANT                ACCOUNTING POLICIES                (Cont.)** |
|-----------------------------|---------------------------------------------------------------------------|

|   | d) | A                summary of the activity in warrants to service providers as of April                30,                2008, and changes during the nine months ended April 30, 2008, are                as                follows: |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | **Number of****warrants** |          | **Weighted-****average****exercise****price** |   | **Weighted-****average****remaining****contractual****term****(in years)** |   | **Aggregate****intrinsic****value** |     |
|--------------------------------------------------------------|--------|--------------------------------|---------------|-----------------------------------------------|--------|---------------------------------------------------------------------------------|--------|-------------------------------------|----------|
|                                                         |   |                           |          |                                          |   |                                                                            |   |                                |     |
| **Outstanding                at August 1, 2007**             |   |                           | **5,880,880** |                                          | **$**  | **0.06**                                                                        |   |                                |     |   |   |   |   |
| **Granted**                                                  |   |                           | **-**         |                                          |   |                                                                            |   |                                |     |   |   |   |   |
| **Exercised**                                                |   |                           | **-**         |                                          |   |                                                                            |   |                                |     |   |   |   |   |
| **Forfeited**                                                |   |                           | **-**         |                                          |   |                                                                            |   |                                |     |   |   |   |   |
|                                               |   |                           |          |                                          |   |                                                                            |   |                                |     |   |   |   |   |
| **Outstanding                at April 30, 2008 (unaudited)** |   |                           | **5,880,880** |                                          | **$**  | **0.06**                                                                        |   |                                | **4.44** |   |   | **180,660** |   |
|                                                    |   |                           |          |                                          |   |                                                                            |   |                                |     |   |   |   |   |
| **Exercisable                at April 30, 2008 (unaudited)** |   |                           | **5,880,880** |                                          | **$**  | **0.06**                                                                        |   |                                | **4.44** |   |   | **180,660** |   |
|                                                    |   |                           |          |                                          |   |                                                                            |   |                                |     |   |   |   |   |
| **Vested                and expected to vest**               |   |                           | **5,880,880** |                                          | **$**  | **0.06**                                                                        |   |                                | **4.44** |   |   | **180,660** |   |

| **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                April 30, 2008 amount to $ 31. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | The                Company's subsidiary obtained a bank guarantee in the amount of $ 7                to secure a rent agreement. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                4:-** | **COMMITMENTS                AND CONTINGENCIES (Cont.)** |
|-----------------------------|----------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

| **NOTE                4:-** | **COMMITMENTS                AND CONTINGENCIES (Cont.)** |
|-----------------------------|----------------------------------------------------------|

|   | d. | On                March 31, 2008, the Company and its former CEO reached a settlement                which                was approved by the Israeli court. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

**Overview** 

----

**TISSERA        INC.**

**(A        development stage company)**

**Research      and License Agreement**

| · | the                expiration of the patents covering such product in the country of                sale;                or |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

| · | 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. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 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. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

|  | · | one                year following the termination of the Research and License Agreement;                and |
|--|--------|-------------------------------------------------------------------------------------------------------------|

|  | · | October                7, 2013. |
|--|--------|---------------------------------|

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

|  | · | 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; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | 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; , $150,000 was paid on October 13, 2006,and $150,000                was                paid on January 17, 2007. Further, the termination for the research                period                was extended from April 10, 2006 to April 9,                2007. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | $50,000                per year commencing from the end of the license period, which has                been                extended until April 9, 2008; |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**TISSERA        INC.**

**(A        development stage company)**

|  | · | 4%                of net sales of all products covered by the Research and License                Agreement; |
|--|--------|--------------------------------------------------------------------------------------------------------------|

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

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

**Significant      Accounting Policies**

|   | a. | Marketable                securities: |
|--------|----|---------------------------------------|

|   | b. | In                July 2006, the FASB issued FASB Interpretation 48, "Accounting for                Uncertainty in Income Taxes" ("FIN 48"). FIN 48 defines the threshold                for                recognizing the benefits of tax return positions in the financial                statements as "more-likely-than-not" to be sustained by the taxing                authority. The recently issued literature also provides guidance                on                derecognition, measurement and classification of income tax uncertainties,                along with any related interest and penalties. FIN 48 also includes                guidance concerning accounting for income tax uncertainties in interim                periods and increases the level of disclosures associated with any                income                tax uncertainties. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**TISSERA        INC.**

**(A        development stage company)**

|   | 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). |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Use      of Estimates***

**RESULTS      OF OPERATIONS**

**Results      of Operations for the Nine Months Ended April 30, 2008 Compared to the Nine      Months Ended April 30, 2007**

**Revenues      and Cost of Goods Sold**

**Operating      Expenses**

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**TISSERA        INC.**

**(A        development stage company)**

**FINANCIAL      INCOME**

**Taxes      on Income**

**Net      Loss**

**LIQUIDITY      AND CAPITAL RESOURCES**

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**TISSERA        INC.**

**(A        development stage company)**

**OFF      BALANCE SHEET ARRANGEMENTS**

**ITEM      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK.**

**ITEM      4. CONTROLS AND PROCEDURES.**

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**TISSERA        INC.**

**(A        development stage company)**

**PART      II**

**OTHER      INFORMATION**

**ITEM      1 - LEGAL PROCEEDINGS**

**ITEM      1A. RISK FACTORS**

**ITEM      2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**ITEM      3 - DEFAULTS UPON SENIOR SECURITIES**

**ITEM      4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS**

**ITEM      5 - OTHER INFORMATION**

**ITEM      6 - EXHIBITS**

| **Exhibit                Number** |   | **Description**                                                                                                                                                                                                                              |
|-----------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1                              |   | Certification                by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a)                of the Exchange Act.                                                                                                    |
|                              |   |                                                                                                                                                                                                                                         |
| 31.2                              |   | Certification                by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a)                of the Exchange Act.                                                                                                    |
|                              |   |                                                                                                                                                                                                                                         |
| 32.1                              |   | Certification                by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b)                of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of                the                United States Code. |
|                              |   |                                                                                                                                                                                                                                         |
| 32.2                              |   | Certification                by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b)                of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of                the                United States Code. |

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**TISSERA        INC.**

**(A        development stage company)**

**SIGNATURES**

|                                |            | TISSERA,                INC.           |
|-------------------------------------|-----------------|----------------------------------------|
|                                |            |                                   |
| Dated:                June 20, 2008 | By:   | /s/ Amos                Eiran     |
|                                |            | Amos                Eiran              |
|                                |            | Chief                Executive Officer |

| Dated:                June 20, 2008 | By:   | /s/                 Alex Werber   |
|-------------------------------------|-----------------|----------------------------------------|
|                                |            | Alex                Werber             |
|                                |            | Chief                Financial Officer |

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