Null condition in formula not working

Hello Folks, I am looking for a formula which should return me rows when SerialNum = somenumber or SerialNum IS NULL. 

This is what i am using to achieve that(Last line is of interest here)

{ORDR.CANCELED} <> "Y" and
(if (InStr ({?Pm-?Project},".") < 5) then
{RDR1.U_Project} = Mid({?Pm-?Project},1,InStr ({?Pm-?Project},";")-1)
else
({RDR1.U_Project} = Mid({?Pm-?Project},1,InStr ({?Pm-?Project},";")-1)) and
({RDR1.SerialNum} = Mid ({?Pm-?Project}, InStr ({?Pm-?Project},";") + 1) OR IsNull({RDR1.SerialNum})))

There is no error in the formula but this simply doesnt return rows for which serianum is null. I am not getting why?

Can someone see something wrong with this.