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<SEC-DOCUMENT>0001000096-07-000314.txt : 20070814
<SEC-HEADER>0001000096-07-000314.hdr.sgml : 20070814
<ACCEPTANCE-DATETIME>20070814161839
ACCESSION NUMBER:		0001000096-07-000314
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070630
FILED AS OF DATE:		20070814
DATE AS OF CHANGE:		20070814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTEGRATED SURGICAL SYSTEMS INC
		CENTRAL INDEX KEY:			0000894871
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				680232575
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12471
		FILM NUMBER:		071055459

	BUSINESS ADDRESS:	
		STREET 1:		1433 N. MARKET BLVD.
		STREET 2:		SUITE 1
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95834
		BUSINESS PHONE:		916-285-9943

	MAIL ADDRESS:	
		STREET 1:		1433 N. MARKET BLVD.
		STREET 2:		SUITE 1
		CITY:			SACRAMENTO
		STATE:			CA
		ZIP:			95834
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>iss6302007.txt
<DESCRIPTION>FORM 10-QSB  (6/30/2007)
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

[X]       Quarterly Report under Section 13 or 15(d) of the Securities Exchange
          Act of 1934

                  For the quarterly period ended June 30, 2007

[ ]       Transition Report under Section 13 or 15(d) of the Securities Exchange
          Act of 1934

               For the transition period from _______ to ________

                         Commission file number: 1-12471


                        INTEGRATED SURGICAL SYSTEMS, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


         Delaware                                                68-0232575
         --------                                                ----------
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                             Identification No.)

                  1433 N. Market Blvd. #1, Sacramento, CA 95834
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (916) 285-9943
                                 --------------
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [  ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the exchange Act). Yes [X ] No [ ]

The number of shares of common stock, $0.01, par value, outstanding on August
13, 2007 was 4,578,501 Transitional Small Business Disclosure format (check
one). Yes [  ] No [ X ]


<PAGE>


<TABLE>
<CAPTION>

                                         Integrated Surgical Systems, Inc.
                                                     Form 10-QSB
                                       for the quarter ended June 30, 2007

                                                   Table of Contents


                                                                                                               Page
                                                                                                               ----
Part I.       Financial Information
<S>                     <C>                                                                                    <C>
                        Item 1.    Financial Statements                                                         2

                         Balance Sheet (unaudited) at June 30, 2007                                             2

                         Statements of Operations (unaudited) for the three months ended June 30, 2007 and      3
                         2006

                         Statements of Operations (unaudited) for the six months ended June 30, 2007 and        4
                         2006

                         Statements of Cash Flows (unaudited) for the six months ended June 30, 2007 and        5
                         2006

                         Notes to Financial Statements (unaudited)                                              6

              Item 2.    Management's Discussion and Analysis                                                   8

              Item 3     Controls and Procedures                                                                10

Part II.      Other Information

              Item 1.    Legal Proceedings                                                                      11

              Item 4.    Submission of Matters to a Vote of Security Holders                                    11

              Item 6.    Exhibits                                                                               11

Signature                                                                                                       12

Certifications                                                                                                  13


<PAGE>


Part I.    Financial Information

           Item 1.  Financial Statements (unaudited)


                                      Integrated Surgical Systems, Inc.
                                                Balance Sheet
                                               June 30, 2007
                                                (Unaudited)

Assets
Current assets:
     Cash                                                                                   4,421,677
                                                                                         ------------
Total assets                                                                             $  4,421,677
                                                                                         ============


Liabilities and stockholders' equity
Current liabilities:
     Accounts payable                                                                    $     22,438
     Accrued employee retention bonus                                                         486,385
     Accrued liabilities                                                                      192,400
     Due to purchaser                                                                         350,000
     Other current liabilities                                                                535,830
                                                                                         ------------
Total current liabilities                                                                   1,587,053

Convertible preferred stock, $0.01 par value, 1,000,000 shares authorized;
     168 shares issued and outstanding ($168,496 aggregate liquidation value)                 168,496
                                                                                         ------------
Total liabilities                                                                           1,755,549
                                                                                         ------------

Stockholders' equity:
     Common stock, $0.01 par value, 100,000,000 shares authorized;
         4,578,501 shares issued and outstanding                                               45,785
     Additional paid-in capital                                                            62,414,160
     Deferred compensation                                                                    (21,254)
     Retained earnings                                                                    (59,772,563)
                                                                                         ------------
Total stockholders' equity                                                                  2,666,128
                                                                                         ------------
                                                                                         $  4,421,677
                                                                                         ============

See accompanying notes to financial statements.


                                                   -2-
<PAGE>



                                          Integrated Surgical Systems, Inc.
                                               Statements of Operations
                                                      (Unaudited)

                                                                     Three months ended June 30,
                                                             ----------------------------------------
                                                                  2007                      2006

Income from continuing operations                            $        --                $        --
                                                             -------------              -------------

Discontinued Operations
     (Loss) gain from operations of discontinued
      business segment (net of taxes of $50,478
      in 2007)                                                  (1,323,212)                   272,905
                                                             -------------              -------------

     Net gain on sale of assets                                  6,176,137                       --
                                                             -------------              -------------

     Income from discontinued operations                                                    4,852,625
                                                             -------------              -------------

Net Income                                                   $   4,852,925              $     272,905
                                                             =============              =============


Basic net income per share
    Continuing                                               $        0.00              $        0.00
    Discontinued                                                      1.06                       0.06
                                                             -------------              -------------

    Net income                                               $        1.06              $        0.06
                                                             =============              =============


Diluted net income per share                                 $        1.06              $        0.03
    Continuing
    Discontinued                                                      1.06                       0.03
                                                             -------------              -------------
   Net income                                                $        1.06              $        0.03
                                                             =============              =============

Shares used in computing basic net income per share              4,578,501                  4,508,409
                                                             =============              =============

Shares used in computing diluted net income per share            4,578,501                  9,474,227
                                                             =============              =============


See accompanying notes to financial statements.

                                                        -3-


<PAGE>



                                          Integrated Surgical Systems, Inc.
                                               Statements of Operations
                                                       (Unaudited)


                                                                              Six months ended June 30
                                                                           2007                    2006
                                                                       -----------             ------------
Net income from continuing operations
                                                                       $       --              $       --

Discontinued Operations
     (Loss) gain from operations of
      discontinued business segment
       (Net of  taxes of $51,278 in 2007)                               (1,253,725)               1,245,413

     Net Gain on sale of assets                                          6,176,137                     --
                                                                       -----------              -----------

Net Income                                                             $ 4,922,412              $ 1,245,413
                                                                       ===========              ===========


Basic net income per share - discontinued operations                   $      1.08              $      0.28
                                                                       ===========              ===========
Diluted net income per share - discontinued operations                 $      1.08              $      0.13
                                                                       ===========              ===========

Shares used in computing basic net income per share                      4,578,501                4,508,409
                                                                       ===========              ===========

Shares used in computing diluted net income per share                    4,578,501                9,474,227
                                                                       ===========              ===========


See accompanying notes to financial statements.

                                                            -4-
<PAGE>


                                                    Integrated Surgical Systems, Inc.
                                                       Statements of Cash Flows
                                                              (Unaudited)

                                                                                Six months ended June 30,
                                                                                 2007                  2006
                                                                             -----------            -----------
CASH FLOWS FROM CONTINUING OPERATING                                         $      --              $      --

CASH FLOWS FROM DISCONTINED OPERATING ACTIVITIES

Net income from discontinued operations                                        4,922,412              1,245,413

Adjustments to reconcile net income from discontinued
 operations to cash flow (used in) provided by
 discontinued operations:
      Gain on sale of assets (including cancellation of
        indebtedness of ($3,876,450 and $83,431)                              (6,176,137)               (83,431)
      Depreciation                                                                 1,118
      Amortization of deferred compensation                                       30,285
      Stock based compensation-employees                                          15,890
      Gain on sale of equipment                                                   (5,000)                (5,000)
      Changes in assets and liabilities
         Accounts receivable                                                     (16,109)                21,289
         Inventory                                                              (415,242)               119,590
         Other current assets                                                      6,237               (113,397)
         Accounts payable                                                        (64,488)                44,743
         Accrued payroll and related expenses                                    (22,508)              (816,429)
         Accrued liabilities                                                     261,538               (105,336)
         Other current liabilities                                              (754,604)              (221,930)
                                                                             -----------            -----------
Net cash (used in) provided by discontinued operating activities              (2,216,608)                85,512
                                                                             -----------            -----------

CASH FLOWS FROM INVESTING ACTIVITIES

Net proceeds from sale of assets (net of legal fees of $20,557)                3,979,443                   --
Purchases of fixed assets                                                        (23,426)
Proceeds from sale of fixed assets                                                 5.000                  5,000
                                                                             -----------            -----------
Net cash provided by discontinued investing activities                         3,961,017                  5,000
                                                                             -----------            -----------

CASH FLOWS FROM DISCONTINUED FINANCING ACTIVITIES
Proceeds from notes Payable                                                    1,350,000
Payments of note payable                                                                               (142,000)
                                                                             -----------            -----------

Net cash  provided by financing activities                                     1,350,000               (142,000)
                                                                             -----------            -----------

Net increase (decrease) in cash and cash equivalents                           3,094,409                (51,488)

Cash and cash equivalents at beginning of year                                 1,327,268                158,789
                                                                             -----------            -----------

Cash and cash equivalents at end of year                                       4,421,677                107,301
                                                                             ===========            ===========


See accompanying notes to financial statements.

                                                          -5-
</TABLE>

<PAGE>



                        Integrated Surgical Systems, Inc.
                    Notes to Financial Statements (unaudited)


1. Organization and Operations

Integrated Surgical Systems, Inc. (Company) was incorporated in Delaware in 1990
to design, manufacture, sell and service image-directed, computer-controlled
robotic software and hardware products for use in orthopedic surgical
procedures. The Company's products are authorized to be sold through
international distributors to hospitals and clinics in European Union member
countries and Australia, Canada, India, Israel, Japan, Korea, New Zealand,
Switzerland and South Africa.

On June 28, 2007, upon the sale of substantially all of its assets, the Company
became inactive. As a result, all the Company's operations have been classified
as discontinued operations for all periods presented.

On June 28, 2007, the stockholders approved the future liquidation of the
Company if the Company is unable to complete an acquisition or similar
transaction within one year from the sale of the assets (Note 3).


2. Significant Accounting Policies

Basis of presentation

The accompanying unaudited financial statements and related notes have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial statements and with the rules and
regulations under Regulation SB of the Securities and Exchange Commission for
Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements presentation. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary to present fairly the financial position as of June 30, 2007 and
results of operations and cash flows for the six months then ended have been
included. These financial statements should be read in conjunction with the
financial statements of the Company together with the Company's management
discussion and analysis in the Company's Form 10-KSB for the year ended December
31, 2006. Interim results are not necessarily indicative of the results for a
full year.

Certain amounts for prior years have been reclassified to conform to 2007
financial statement presentations.

The financial statements include all the accounts of the Company.

Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Actual results
could differ from those estimates. Significant estimates made by management
include revenue recognition, allowances for inventory and warranty liability.

New Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.


3. Gain on Sale of Assets

On June 28, 2007, the Company sold substantially all of its assets in exchange
for $4,000,000 in cash, plus the cancellation of a note payable in the amount of
$3,700,000 and accrued interest thereon of $234,462. The gain on sale of assets
consisted of the following:


                                      -6-

<PAGE>



   Proceeds
         Cash                                                       $ 4,000,000
         Cancellation of indebtedness                                 3,934,462
                                                                    -----------
              Total proceeds                                          7,934,462

Net book value of assets sold                                        (1,001,007)
Employee retention incentives                                          (486,385)
Present value of net future lease payments                             (250,376)
Legal expenses                                                          (20,557)
                                                                    -----------
           Gain on sale of assets                                   $ 6,176,137
                                                                    ===========


In connection with the sale:

     (a)  Certain employees of the Company received payments to remain with the
          Company until the closing date to effect an orderly transfer of assets
          to the purchaser.

     (b)  The purchaser has agreed to sublease the Company's space for one year.
          The Company has accrued the present value of the rent for the balance
          of the lease term, net of the rent to be received under the sublease.

After the utilization of the Company's net operating loss carryforwards for
Federal and state purposes, the Company's income taxes on the gain were
approximately $39,000.


4. Common Stock

Effective July 26, 2007, the Company declared a 1-for-10 reverse stock split of
its outstanding shares of common stock. All share and per share amounts have
been restated for the split. During the second quarter of 2007, the Company
issued options to purchase 30,500 shares of common stock to employees valued at
$8,245. Options to purchase 20,000 shares of common stock are exercisable at
$0.35, per share, through April 11, 2012, 10,000 shares of common stock are
exercisable at $0.31, per share, through April 29, 2012 and 500 shares of common
stock are exercisable at $0.31, per share, through April 30, 2007.


5. Income Taxes

     Effective January 1, 2007, the Company adopted the provisions of Financial
Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in the Company's financial statements in accordance with FASB Statement 109,
"Accounting for Income Taxes", and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition.

     Management has evaluated and concluded that there are no significant
uncertain tax positions requiring recognition in the Company's financial
statements as of January 1, 2007. The evaluation was performed for the tax years
ended December 31, 2003, 2004, 2005 and 2006, the tax years which remain subject
to examination for Federal and California purposes as of June 30, 2007.

     The Company's policy is to classify assessments, if any, for tax related
interest as interest expenses and penalties as general and administrative
expenses.


                                      -7-
<PAGE>



     Item 2. Management's Discussion and Analysis

Forward-Looking Statements

The discussion in this Quarterly Report on Form 10-QSB contains forward-looking
statements that have been made pursuant to the provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based on current expectations, estimates and projections about the software
industry and certain assumptions made by the Company's management. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"could," "would," "may" and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict; therefore, actual results may
differ materially from those expressed or forecasted in any such forward-looking
statements. Unless required by law, the Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. However, readers should carefully
review the risk factors set forth in other reports or documents the Company
files from time to time with the SEC, particularly the Company's Annual Report
on Form 10-KSB, Quarterly Reports on Form 10-QSB and any Current Reports on Form
8-K.

The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto in Part I, Item 1 of this Quarterly
Report on Form 10-QSB and with the audited Financial Statements and Notes
thereto, together with Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2006 as filed with
the SEC.

Overview

We were incorporated in Delaware in 1990 to design, manufacture, sell and
service image-directed, computer-controlled robotic software and hardware
products for use in orthopedic surgical procedures. Although we had not received
clearance to market the ROBODOC(R) System (ROBODOC) in the U.S., we were
permitted to export the system provided certain requirements were met. Products
approved for use by European Union member countries and Australia, Canada,
India, Israel, Japan, Korea, New Zealand, Switzerland and South Africa, do not
require U.S. FDA export approval. We had sold our robotic systems to
international distributors, who in turn resold the product in their territories.
Our international distributors were KTEC in Japan, ROCOM Frontier in Korea and
Paramount Impex in India.

Description of the sales transaction

On August 4, 2006, we entered into an Asset Purchase Agreement with Novatrix
Biomedical, Inc. ("Novatrix"), as amended, pursuant to which we agreed to sell
substantially all of our assets to Novatrix (the "Asset Purchase Agreement"). As
consideration for the sale, Novatrix would pay $4,000,000 for the assets.

The Loan Agreement provided that upon entering into the Asset Purchase
Agreement, Novatrix will meet its obligations to us by providing the balance of
any loans due to us to fund our working capital in equal amounts for the purpose
of developing the ROBODOC and ORTHODOC products. In addition, the Loan Agreement
provided that upon the approval by our stockholders of the asset sale, all of
our obligations owing under the Loan Agreement shall be forgiven.

On June 28, 2007, the Company completed the sale of substantially all of its
assets in exchange for $4,000,000 in cash, plus the cancellation of the note
payable in the amount of $3,700,000 and accrued interest thereon of $234,462.
The gain on sale of assets consisted of the following (as noted in Notes to
Financial Statement, 3. Gain on Sale):


                                      -8-
<PAGE>



Proceeds
  Cash                                                              $ 4,000,000
  Cancellation of indebtedness                                        3,934,462
       Total proceeds                                                 7,934,462
                                                                    -----------

  Net book value of assets sold                                      (1,001,007)
  Employee retention incentives                                        (486,385)
  Present value of net future lease payments                           (250,376)
  Legal expenses                                                        (20,557)
                                                                    -----------
    Gain on sale of assets                                          $ 6,176,137
                                                                    ===========

Revenues

Product revenue had consisted of sales of our principal orthopedic product, the
ROBODOC(R) Surgical Assistant System ("ROBODOC"), which integrated the
ORTHODOC(R) Presurgical Planner ("ORTHODOC") with a computer-controlled robot
for use in joint replacement surgeries. We had developed specialized operating
software for several implant manufacturing companies. These implant
manufacturers' contracted with us for the development of software for particular
lines of new prosthesis to be used with the ROBODOC system.

Results of operations

We generated net income for the second quarter of 2007 of $4,853,000
or $1.06 per basic and dilutive share, compared to net income of $273,000 or
$0.06 per basic share and $0.03 per dilutive share for the second quarter of
2006.

We generated net income for the first half of 2007 of $4,922,000 or $1.08 per
basic and dilutive share, compared to net income for the first half of 2006 of
$1,245,000 or $0.28 per basic and $0.13 per dilutive share.

Discontinued operations

The Company recorded a net loss from discontinued operations before the sale of
assets to Novatrix of $1,323,000 or $0.27 loss per basic and dilutive shares in
Q2 of 2007 as compared to a net gain of $273,000 or $0.06 and $0.03 gain per
basic and dilutive shares for the same comparative quarter of 2006. The lack of
sales in the second quarter of 2007 as compared to the same quarter of 2006 and
the effort of the Company to complete the process involved in obtaining
clearance from the FDA to market the ROBODOC system in the U.S. during Q2 of
2007 was the primary reason for this change.

For the first six month period of 2007 the Company recorded a loss from the
discontinued business operations before the sale of assets to Novatrix of
$1,254,000 or $0.27 and $0.22 loss per basic and dilutive shares as compared to
a gain of $1,245,000 or $0.28 and $0.13 gain per basic and dilutive shares for
the same six month period of 2006. The gain in 2006 was primarily the result of
the sale of two ROBODOC Systems while there were no comparative sales in 2007.

For the three month and six month period of 2007 the Company recorded a gain on
sale of assets of $6,176,000.

Liquidity and Capital Resources

The Board has retained two of its outside directors, its Chief Financial
Officer, and its Secretary as part time consultants to assist with our
continuing obligations under the federal securities laws and to evaluate various
merger, acquisition or strategic alliance opportunities We anticipate that it
will take up to twelve months to conclude this process. While no assurance can
be given that such opportunities will be available, or if available, on
favorable terms, we believe there are numerous opportunities. If we are
unsuccessful with respect to a suitable opportunity within twelve months of the
closing of the Novatrix transaction, we will liquidate the Company and
distribute all our remaining assets, primarily cash, to our stockholders.


                                      -9-
<PAGE>



We believe our current cash position is adequate to carry out our plan.

At June 30, 2007, our "quick ratio" (cash and accounts receivable divided by
current liabilities), a conservative liquidity measure designed to predict our
ability to pay bills, was 2.79.

Net cash used in discontinued operating activities was $2,253,000 for the six
months ended June 30, 2007. Cash flows provided from investing activities were
$3,982,000 and resulted primarily from cash received from the sale of assets of
$4,000,000. Cash flows provided by financing activities were $1,366,000 and
consisted of $1,016,000 from discontinued operations and $350,000 received to be
used exclusively by the purchaser.

We anticipate that we will incur operating losses in the next twelve months.

We do not have any material commitments for capital expenditures.

We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, liquidity or capital resources that
are material to our investors.

Critical Accounting Policies and Estimates

The preparation of our unaudited financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate the estimates, including those
related to bad debts, inventories, warranties, contingencies and litigation. We
base these estimates on historical experience and on other assumptions believed
to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. We have discussed our critical
accounting policies with our independent accountants. Actual results may differ
from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affected our more
significant judgments and estimates used in the preparation of our financial
statements:

We recognized revenue from sales of our products upon the completion of
equipment installation and training at the end-user's site, except when the
sales contract requires formal customer acceptance. Equipment sales with
contractual customer acceptance provisions were recognized as revenue upon
written notification of customer acceptance, which generally occurs after the
completion of installation and training. Furthermore, due to business customs in
Japan and the interpretation of Japanese law, all equipment sales to Japan were
recognized after customer acceptance, which generally occurs after the
completion of installation and training. Revenue related to maintenance and
service contracts was recognized ratably over the duration of the contracts.

We periodically evaluated the need for allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make required
payments.


Item 3.   Controls and Procedures

(a) Under the supervision and with the participation of management, including
our former President, Chief Executive Officer and Chief Financial Officer, an
evaluation was made of the effectiveness of our disclosure controls and
procedures, as such term is defined under Rule 13a-15(e) promulgated under the
Securities Exchange Act of 1934, as amended. Based upon that evaluation, our
former President, Chief Executive Officer and our Chief Financial Officer
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this quarterly report.


                                      -10-
<PAGE>



(b) There has been no significant changes in our internal control over financial
reporting during the quarter ended June 30, 2007 that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.


Part II. Other Information
Item 1.  Legal Proceedings
There were no current proceedings or litigation involving us that we believe if
judgment were rendered against us would have a material adverse impact on our
financial position, results of operation or cash flows.


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

The annual meeting of the stockholders was held on June 28, 2007. At the
meeting, stockholders voted upon the following matters:

          1. Election of directors


                                                                      AUTHORITY
                                             FOR                      WITHHELD
                                             ---                      --------

         Ramesh C. Trivedi (1)            37,688,812                 6,465,088
         Michael J. Tomczak               40,440,358                 3,713,542
         Peter B. Mills (2)               40,454,858                 3,699,042

          2. Amendment to our Restated Certificate of Incorporation to effect a
             one-for-ten reverse stock split of our common stock:

                        FOR                AGAINST              ABSTAIN
                        ---                -------              -------
                    38,548,943            5,307,611             297,347

          3. The sale of substantially all of our assets to Novatrix Biomedical,
             Inc.:

                        FOR                  AGAINST            ABSTAIN
                        ---                  -------            -------
                    25,362,721              973,724            215,755

          4. The liquidation of the Company in the event that it is unable to
             complete an acquisition or similar strategic transaction wi

                        FOR                AGAINST              ABSTAIN
                        ---                -------              -------
                    24,690,959            1,536,959            324,248

               (1)  On July 16, 2007, Ramesh C. Trivedi resigned as President,
                    Chief Executive Officer, Director and Chairman of the Board
                    of Directors of the Company.

               (2)  On July 18, 2007 Peter B. Mills was appointed Chief
                    Executive Officer and President of the Company.


Item 6.   Exhibits

(a)Exhibits


31.1    Certification Pursuant to Exchange Act Rule 13a-14(a) of Peter B. Mills
31.2    Certification Pursuant to Exchange Act Rule 13a-14(a) of David H. Adams
32.1    Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
        of Peter B. Mills
32.2    Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
        of David H. Adams

                                      -11-
<PAGE>


SIGNATURES

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


                                        INTEGRATED SURGICAL SYSTEMS, INC.


                                        By: /s/ DAVID H. ADAMS
                                            -----------------------------------
                                        David H. Adams, Chief Financial Officer


August 14, 2007


                                      -12-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>iss6302007exh311.txt
<DESCRIPTION>RULE 13A-14(A)/15D-14(A) CERTIFICATIONS
<TEXT>


                                                                    Exhibit 31.1


CERTIFICATION


I, Peter B. Mills, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Integrated Surgical
     Systems, Inc. (the "registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of and for the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant is made known to us by others within those entities,
          particularly during the period in which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.




/s/ Peter B. Mills
- ------------------------------------------------

Peter B. Mills, Chief Executive Officer

August 14, 2007



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>iss6302007exh312.txt
<DESCRIPTION>RULE 13A-14(A)/15D-14(A) CERTIFICATIONS
<TEXT>


                                                                    Exhibit 31.2


                                  CERTIFICATION





I, David H. Adams, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Integrated Surgical
     Systems, Inc. (the "registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of and for the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant is made known to us by others within those entities,
          particularly during the period in which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors:

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.




/s/ David H. Adams
- --------------------------------------------

David H. Adams, Chief Financial Officer

August 14, 2007


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>iss6302007exh321.txt
<DESCRIPTION>SECTION 1350 CERTIFICATIONS
<TEXT>


                                                                    Exhibit 32.1





                                  CERTIFICATION



In connection with the Quarterly Report on Form 10-QSB of Integrated Surgical
Systems, Inc. (the "Company") for the period ended June 30, 2007, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Peter B. Mills, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. 1350, that:




     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and



     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.






/s/ Peter B. Mills
- --------------------------------------------------

Peter B. Mills, Chief Executive Officer

August 14, 2007


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>iss6302007exh322.txt
<DESCRIPTION>SECTION 1350 CERTIFICATIONS
<TEXT>


                                                                    Exhibit 32.2





                                  CERTIFICATION





In connection with the Quarterly Report on Form 10-QSB of Integrated Surgical
Systems, Inc. (the "Company") for the period ended June 30, 2007, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
David H. Adams, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. 1350, that:


     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and



     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company.



/s/ David H. Adams
- ---------------------------------------
David H. Adams, Chief Financial Officer

August 14, 2007
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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