UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    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 June 30, 2009
                                       or

|_|    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                        Commission file number: 1-12471

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

            Delaware                                             68-0232575
            --------                                             ----------
(State or Other Jurisdiction of                                 (IRS Employer
 Incorporation or Organization)                              Identification No.)

            401 Wilshire Blvd., Suite 1020
               Santa Monica, California                            90401
               ------------------------                            -----
       (Address of Principal Executive Offices)                 (Zip Code)

                                 (310) 526-5000
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_|                   Non-accelerated filer |_|
Accelerated filer |_|                         Smaller reporting company |X|
                  (Do not check if a smaller reporting company)

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

As of August 12, 2009 there were 7,611,854 shares of the registrant's common
stock outstanding.





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                                                    Integrated Surgical Systems, Inc.
                                                              Form 10-Q
                                                 for the six months ended June 30, 2009


                                                           Table of Contents

                                                                                                                    Page
Part I.       Financial Information

              Item 1.       Financial Statements                                                                      2

                            Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008 (audited)               2

                            Statements of Operations (unaudited) for the six months ended June 30, 2009 and 2008      3

                            Statements of Operations (unaudited) for the three months ended June 30, 2009 and         4
                            2008

                            Statements of Cash Flows (unaudited) for the six months ended June 30, 2009 and 2008      5

                            Notes to Financial Statements (unaudited)                                                 6

              Item 2.       Management's Discussion and Analysis of Financial Condition and Results of               15
                            Operations

              Item 3.       Quantitative and Qualitative Disclosures About Market Risk                               17

              Item 4T.      Controls and Procedures                                                                  17

Part II.      Other Information

              Item 1.       Legal Proceedings                                                                        18

              Item 6.       Exhibits                                                                                 18

Signatures                                                                                                           20

Certifications                                                                                                       21


<PAGE>


Part I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements.

                                                 Integrated Surgical Systems, Inc.
                                                          Balance Sheets

Assets                                                                                June 30,            December 31,
                                                                                        2009                 2008
                                                                                    (Unaudited)           (Audited)
                                                                                   ----------------------------------

Current assets:
    Cash                                                                           $  2,810,370          $  3,322,358
    Investment in available-for-sale securities                                       1,520,173             1,116,151
    Other current assets                                                                 19,240                62,822
                                                                                   ----------------------------------
Total current assets                                                                  4,349,783             4,501,331
                                                                                   ----------------------------------

Total assets                                                                       $  4,349,783          $  4,501,331
                                                                                   ==================================

Liabilities and stockholders' equity

Current liabilities:
    Accounts payable                                                               $      5,794          $      4,951
    Accrued liabilities                                                                  15,113                 3,000
    Accrued stock compensation                                                           59,066                34,066
    Income taxes payable                                                                   --                     800
    Deferred rent - current portion                                                      22,896                22,379
                                                                                   ----------------------------------
Total current liabilities                                                               102,869                65,196

Rent deposit                                                                              8,175                 8,175
Deferred rent - noncurrent                                                               11,606                23,185
                                                                                   ----------------------------------
Total liabilities                                                                       122,650                96,556

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


Stockholders' equity:
    Common stock, $0.01 par value, 100,000,000 shares authorized;
        7,474,894 shares issued and outstanding                                          74,749                74,749
    Additional paid-in capital                                                       64,116,508            64,101,448
    Accumulated deficit                                                             (60,133,726)          (59,943,265)
    Accumulated other comprehensive income                                                1,106                 3,347
                                                                                   ----------------------------------
Total stockholders' equity                                                            4,058,637             4,236,279
                                                                                   ----------------------------------

Total liabilities and stockholders' equity                                         $  4,349,783          $  4,501,331
                                                                                   ==================================

See accompanying notes to financial statements.

                                                             2
<PAGE>


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

                                                                                   Six Months ended June 30,
                                                                                   2009                2008
                                                                               -----------          -----------


General and administrative expenses                                            $   216,193          $    39,742
                                                                               -----------          -----------

Loss from operations                                                              (216,193)             (39,742)

Other income
     Interest income, net                                                           24,280               35,195
     Realized gain on available for sale securities                                  2,252                 --
                                                                               -----------          -----------

Loss before income taxes                                                          (189,661)              (4,547)

Income taxes                                                                           800                 --
                                                                               -----------          -----------

Net Loss                                                                       $  (190,461)         $    (4,547)
                                                                               ===========          ===========

Basic net loss per common share                                                $     (0.03)         $      --
                                                                               ===========          ===========

Diluted net loss per common share                                              $     (0.03)         $      --
                                                                               ===========          ===========

Weighted average number of shares outstanding:
   Basic                                                                         7,474,894            5,628,841
                                                                               ===========          ===========
   Diluted                                                                       7,474,894            5,628,841
                                                                               ===========          ===========


See accompanying notes to financial statements.

                                                           3

<PAGE>


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

                                                                       Three Months ended June 30,
                                                                      2009                     2008
                                                                  -----------               ----------


General and administrative expenses                               $    82,772               $  (120,244)
                                                                  -----------               -----------

Income (loss) from operations                                         (82,772)                  120,244

Other income
     Interest income, net                                              14,543                    17,054
     Realized gain on available for sale securities                     2,867                      --
                                                                  -----------               -----------

Income (loss) before income taxes                                     (65,362)                  137,298

Income taxes                                                             --                        --
                                                                  -----------               -----------

Net income (loss)                                                 $   (65,362)              $   137,298
                                                                  ===========               ===========

Basic net income (loss) per common share                          $     (0.01)              $      0.02
                                                                  ===========               ===========

Diluted net income (loss) per common share                        $     (0.01)              $      0.02
                                                                  ===========               ===========

Weighted average number of shares outstanding:
   Basic                                                            7,474,894                 6,679,181
                                                                  ===========               ===========
   Diluted                                                          7,474,894                 7,143,498
                                                                  ===========               ===========


See accompanying notes to financial statements.

                                                       4
<PAGE>


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

                                                                                      Six Months ended June 30,
                                                                                      2009                 2008
                                                                                   -----------          -----------

Cash flows from operating activities
Net loss                                                                           $  (190,461)         $    (4,547)
Adjustments to reconcile net loss to cash used in operating activities:
          Stock-based compensation                                                      15,060                6,609
          Realized gain on available-for-sale securities                                (2,252)                --
          Changes in assets and liabilities
             Other current assets                                                       43,582               38,499
             Accounts payable                                                              843               57,617
             Accrued liabilities                                                        12,113               (6,090)
             Accrued stock compensation                                                 25,000                 --
             Income taxes payable                                                         (800)             (31,482)
             Rent deposit received                                                        --                  8,175
             Deferred rent payable                                                     (11,062)            (206,415)
                                                                                   -----------          -----------
Cash used in operating activities                                                     (107,977)            (137,634)
                                                                                   -----------          -----------

Cash flows from investing activities

             Purchase of available-for-sale securities                              (2,014,661)                --

             Sale of available-for-sale securities                                   1,610,650                 --
                                                                                   -----------          -----------
Cash used in investing activities                                                     (404,011)                --

Cash flows from financing activities
          Proceeds from sale of common stock                                              --              1,750,000
          Offering cost                                                                   --                (58,258)
                                                                                   -----------          -----------
Cash provided by financing activities                                                     --              1,691,742

Net increase (decrease) in cash                                                       (511,988)           1,554,108

Cash at beginning of period                                                          3,322,358            3,099,199
                                                                                   -----------          -----------


Cash at end of period                                                              $ 2,810,370          $ 4,653,307
                                                                                   ===========          ===========


Supplemental disclosures of cash flow information:

       Income taxes paid                                                           $     1,600          $      --

       Unrealized loss on available-for-sale securities                            $    (2,241)         $      --

See accompanying notes to financial statements.

                                                               5
<PAGE>


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

1.     Organization and Operations

Integrated Surgical Systems, Inc. (the "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 were 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.

On June 28, 2007, the stockholders approved the future liquidation of the
Company if the Company was unable to complete an acquisition or similar
transaction within one year of the sale of its assets. At the same time, our
stockholders granted the Board of Directors authority to abandon any decision to
liquidate without further stockholder action if it determines the liquidation is
not in the best interests of the Company or our stockholders. The Board of
Directors decided it is in the best interest of the Company and its stockholders
to not liquidate.


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 of America for interim financial statements and with the rules and
regulations under Regulation S-X of the Securities and Exchange Commission for
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America 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, 2009 and
results of operations and cash flows for the six months and three 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-K for the
year ended December 31, 2008. Interim results are not necessarily indicative of
the results for a full year.

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 of America 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.

New Accounting Pronouncements

In December 2007, the FASB issued Statement of Financial Accounting Standards
No. 141R, "Business Combinations" ("SFAS 141R"), which replaces SFAS No. 141,
"Business Combinations." SFAS 141R establishes principles and requirements for
determining how an enterprise recognizes and measures the fair value of certain
assets and liabilities acquired in a business combination, including
non-controlling interests, contingent consideration, and certain acquired
contingencies. SFAS 141R also requires acquisition-related transaction expenses
and restructuring costs be expensed as incurred rather than capitalized as a


                                       6
<PAGE>


component of the business combination. SFAS 141R will be applicable
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. SFAS 141R would have an impact on accounting for any
businesses acquired after the effective date of this pronouncement.

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51" ("SFAS 160").
SFAS 160 establishes accounting and reporting standards for the non-controlling
interest in a subsidiary (previously referred to as minority interests). SFAS
160 also requires that a retained non-controlling interest upon the
deconsolidation of a subsidiary be initially measured at its fair value. Upon
adoption of SFAS 160, the Company would be required to report any
non-controlling interests as a separate component of stockholders' equity. The
Company would also be required to present any net income allocable to
non-controlling interests and net income attributable to stockholders of the
Company separately in its consolidated statements of income. SFAS 160 is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. SFAS 160 requires retroactive adoption
of the presentation and disclosure requirements for existing minority interests.
All other requirements of SFAS 160 shall be applied prospectively. SFAS 160
would have an impact on the presentation and disclosure of the non-controlling
interests of any non wholly-owned businesses acquired in the future. The Company
does not currently expect the adoption of SFAS 160 to have a material effect on
its results of operations and financial condition.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative and
Hedging Activities" ("SFAS 161"). SFAS 161 amends and expands the disclosure
requirements related to derivative instruments and hedging activities. SFAS 161
requires qualitative disclosures about credit-risk-related contingent features
in derivative agreements. The provisions of SFAS 161 are effective for fiscal
years beginning after December 15, 2008. The Company does not currently expect
the adoption of SFAS 161 to have a material effect on its results of operations
and financial condition.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165").
SFAS 165 establishes standards of accounting and disclosure of events after the
balance sheet date but before financial statements are issued. SFAS 165 requires
disclosure of the date through which subsequent events have been evaluated and
the basis for the date. The provisions of SFAS 165 are effective for interim and
annual periods ending after June 15, 2009. The Company does not currently expect
the adoption of SFAS 165 to have a material effect on its results of operations
and financial condition. For the period ended June 30, 2009, the subsequent
events assessment was performed through August 11, 2009. This was the date on
which the company's board of directors approved these financial statements.

In June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of
Financial Assets" ("SFAS 166"). SFAS 166 is a revision of SFAS No. 140
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." SFAS 166 will require more information about transfers of
financial assets and where companies have continuing exposure to the risks
related to transfered financial assets. SFAS 166 eliminates the concept of a
"qualifying special-purpose entity", changes the requirements for derecognizing
financial assets and requires additional disclosures. The provisions of SFAS 166
are effective at the start of a company's first fiscal year beginning after
November 15, 2009. 2009. The Company does not currently expect the adoption of
SFAS 166 to have a material effect on its results of operations and financial
condition.

In June 2009, the FASB issued SFAS No. 168, "Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles" ("SFAS 168").
SFAS 168 replaces SFAS No. 162 "The Hierarchy of Generally Accepted Accounting


                                       7

<PAGE>


Principles." SFAS 168 does not change generally accepted accounting principles
("GAAP"). Rather, it defines the accounting standards codification which will
become the source of authoritative U.S. GAAP to be applied by nongovernmental
entities. The provisions of SFAS 168 are effective for interim and annual
periods beginning after September 15, 2009. The Company does not currently
expect the adoption of SFAS 168 to have a material effect on its results of
operations and financial condition.

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


3.     Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Diluted net income (loss) per share is computed by dividing net income (loss) by
the weighted average number of shares of common stock outstanding during the
period plus dilutive common stock equivalents, using the treasury stock method.

Convertible preferred stock of 734,187 shares, a warrant for 30,000 shares and
stock options of 160,000 were excluded from the calculation of loss per share
for the six months and three months ended June 30, 2009, because their effect
was anti-dilutive. Convertible preferred stock of 450,524 shares, a warrant for
30,000 shares and stock options of 63,050 were excluded from the calculation of
loss per share for the six months ended June 30, 2008, because their effect was
anti-dilutive. For the three months ended June 30, 2008 dilutive common stock
equivalents were convertible preferred stock of 450,524 shares and stock options
of 13,793.

A warrant for 30,000 shares and stock options of 5,050 were excluded from the
calculation of income per share for the three months ended June 30, 2008 because
their exercise price was greater than the Company's weighted average stock price
for the period.


4.     Investment in Available-for-Sale Securities

The following is a summary of the Company's investment in available-for-sale
securities as of June 30, 2009:

                                                          Unrealized          Unrealized
                                         Cost               Gains               Losses            Fair Value
                                      ----------          ----------          ----------           ----------

U.S. federal agency securities        $1,097,847          $    2,049          $     (721)          $1,099,175
Corporate securities                     421,220               1,970              (2,192)             420,998
                                      ----------          ----------          ----------           ----------
  Total                               $1,519,067          $    4,019          $   (2,913)          $1,520,173
                                      ==========          ==========          ==========           ==========

The cost and fair value of investment in available-for-sale debt securities, by
contractual maturity, as of June 30, 2009, are as follows:


                                       8
<PAGE>


                                                                         Fair
                                                         Cost            Value
                                                      ----------      ----------

Due within one year                                   $  305,425      $  305,789
Due after one year through three years                   437,994         438,525
Due after three years                                    775,648         775,859
                                                      ----------      ----------
                                                      $1,519,067      $1,520,173
                                                      ==========      ==========

Expected maturities will differ from contractual maturities because the issuers
of certain debt securities have the right to call or prepay their obligations
without any penalties. The Company intends to be opportunistic with the purchase
and sale of its debt securities and expects all the securities to be sold or
called during the twelve-months ended June 30, 2010. Therefore, the Company has
classified the entire fair value of its investment in available-for-sale debt
securities as current assets in the accompanying balance sheets.

SFAS No. 157 clarifies that fair value is an exit price, representing the amount
that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants. As such, fair value is a
market-based measurement that is determined based on assumptions that market
participants would use in pricing an asset or a liability. As a basis for
considering such assumptions, SFAS No. 157 establishes a three-tier value
hierarchy, which prioritizes the inputs used in the valuation methodologies in
measuring fair value:

     o    Level 1 - Observable inputs that reflect quoted prices (unadjusted)
          for identical assets or liabilities in active markets.

     o    Level 2 - Include other inputs that are directly or indirectly
          observable in the marketplace.

     o    Level 3 - Unobservable inputs which are supported by little or no
          market activity.

     The fair value hierarchy also requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value.

     In accordance with SFAS No. 157, we measure our cash and investments in
available-for-sale securities at fair value. Our cash and investments in
available-for-sale securities are classified within Level 1 by using quoted
market prices utilizing market observable inputs.


5.     Common Stock

On April 25, 2008, the Company sold an aggregate of 2,896,394 shares of common
stock at $0.6042 per share, for an aggregate purchase price of $1,750,000. The
Company incurred $58,258 of expenses in connection with the offering. Certain of
the investors are affiliated with the Company's advisory services firm that is
currently providing investment banking services.


                                       9
<PAGE>


6.     Convertible Preferred Stock

The Company's Certificates of Incorporation authorized 1,000,000 shares of
undesignated, serial preferred stock. Preferred stock may be issued from time to
time in one or more series. The Board of Directors is authorized to determine
the rights, preferences, privileges, and restrictions granted to and imposed
upon any wholly unissued series of preferred stock and designation of any such
series without any further vote or action by the Company's stockholders.

As of June 30, 2009 and December 31, 2008, the Company's only outstanding series
of convertible preferred stock is the Series G Convertible Preferred Stock
("Series G").

The Series G stock has a stated value of $1,000 per share, and is convertible
into common stock at conversion price equal to 85% of the lowest sale price of
the common stock on its listed market over the five trading days preceding the
date of conversion ("Beneficial Conversion Feature"), subject to a maximum
conversion price. The number of shares of common stock that may be converted is
determined by dividing the stated value of the number of shares of convertible
preferred stock to be converted by the conversion price. The Company may elect
to pay the Series G holder in cash at the current market price multiplied by the
number of shares issuable upon conversion.

The value that had been assigned to the Beneficial Conversion feature of the
Series G was based on the difference between the maximum conversion price and
quoted market price of the common stock on the date that the Series G was sold
(the "Discount"). The Discount was accreted using the straight-line method over
the conversion period. The Series G does not entitle holders to dividends or
voting rights, unless required by law.

For the six months ended June 30, 2009 and the year ended December 31, 2008, no
shares of Series G were converted into shares of common stock. At June 30, 2009
and December 31, 2008, the outstanding Series G shares could have been converted
into a minimum of 734,187 and 707,966 shares of common stock, respectively.

Upon a change in control, sale of or similar transaction, as defined, each
holder of the Series G has the option to deem such transaction as a liquidation
and may redeem their shares at the liquidation value of $1,000, per share, for
an aggregate amount of $168,496. As such redemption is not in control of the
Company, the Series G preferred stock has been accounted for as if they were
redeemable preferred stock and are classified on the balance sheet between
liabilities and stockholders' equity.


7.     Stock-based compensation

The Company currently has a stock option plan to attract, motivate and retain
selected officers, employees, directors and consultants under which incentive or
non-incentive options may be granted, generally for a term of ten years from the
date of grant. Exercise prices of incentive stock options may not be less than
100% and exercise prices of non-statutory stock options may not be less than 85%
of the fair market value of the common stock on the date of the grant. For
persons owning 10% or greater of the voting power of all classes of the
Company's stock, the exercise price of the incentive or the non-qualified stock
options may not be less than 110% of the fair market value of the common stock
on the date of the grant. The plan is administered by the Company's board of
directors.

SFAS 123(R) requires entities to estimate the number of forfeitures expected to
occur and record expense based upon the number of awards expected to vest. Prior
to adoption of SFAS No. 123(R), the Company accounted for forfeitures as they


                                       10
<PAGE>


occurred, as permitted under SFAS No. 123. The cumulative effect of adopting the
method change of estimating forfeitures is not material to the Company's
financial statements for the six months and three months ended June, 2009.

The 1998 Stock Option Plan (1998 Plan) was established to grant up to 85,000
non-qualified options through May 12, 2008 to employees and other individuals
providing services to the Company. Options under the 1998 Plan vest variably
from one year to four years from the date grant and must be exercised within 30
days of employee termination. As of June 30, 2009 the plan had expired;
therefore, no options were available for future grant.

The 2000 Stock Award Plan (2000 Plan) was established to grant up to 100,000
incentive options through December 11, 2010 to employees, excluding officers and
directors, and other individuals providing services to the Company. Options
under the 2000 Plan vest variably from one year to four years from the date
grant and must be exercised within three months of employee termination. As of
June 30, 2009 and December 31, 2008, the 2000 plan had 98,046 options available
for future grant.

Under both plans, exercised, forfeited/expired or cancelled shares may be
reissued.

Options outstanding or options forfeited/expired may be from expired plans. For
the six months ended June 30, 2009, option activity was as follows:

                                                                                      Remaining
                                                             Weighted-Average         Contractual  Aggregate Fair
                                          Shares              Exercise Price             Term           Value
                                          -----------------------------------------------------------------------

Outstanding at beginning of period           161,000           $    0.97
Granted                                         --             $   --
Expired and forfeited                          1,000           $   36.25
Exercised                                       --             $   --
                                            -------------------------------------------------------------------
Outstanding at end of period                 160,000           $    0.75                  3.65        $ 43,335

Exercisable at June 30, 2009                  60,000           $    1.35                  1.09        $ 13,215

The Company expects options un-vested at June 30, 2009 for 100,000 shares of
common stock will vest during the year ended December 31, 2009.

The Company recorded stock-based compensation expense, related to its stock
options, which is included in general and administrative expenses, for the six
months ended June 30, 2009 and 2008, of $15,060 and $ 6,609 respectively, and
for the three months ended June 30, 2009 and 2008, of $7,530 and $3,305
respectively.

The Company's stock options have no intrinsic value as of June 30, 2009.

As of June 30, 2009 a summary of options outstanding under the plans was as
follows:

  Range of          Weighted-Average           Number             Weighted-          Number           Weighted-
  Exercise       Remaining Contractual     Outstanding at         Average        Exercisable at        Average
  Price               Life (Years)             6/30/09         Exercise Price        6/30/09       Exercise Price
-----------------------------------------------------------------------------------------------------------------
0.00-9.99                  3.7                 158,000             $0.36             58,000             $0.34
10.00-30.99                0.6                   1,500             29.17              1,500             29.17
31.00-37.00                0.1                     500             35.63                500             35.63
                           ---                 -------             -----             ------             -----
                           3.9                 160,000             $0.75             60,000             $1.35
                           ===                 =======             =====             ======             =====



                                       11
<PAGE>


The following is a summary of the status of the Company's non-vested options as
of June 30, 2009, and changes during the six month period ended June 30, 2009:

                                                                  Weighted-
                                                               Average-Grant-
Non-vested Shares                                Shares       Date Fair Value
-----------------------------------------------------------------------------

Non-vested at beginning of period                 100,000         $0.30
Granted                                                 -           -
Expired and Forfeited                                   -           -
Vested                                                  -           -
-----------------------------------------------------------------------------
Non-vested at end of period                       100,000         $0.30


Stock-based compensation expense of $3,765 will be recognized for non-vested
options at Net June 30, 2009 during the remainder of the year ended
December 31, 2009.

During 2008, the Company agreed to compensate two of its directors with common
stock in lieu of cash compensation and accrued $34,066 as of December 31, 2008.
The number of shares was to be determined based upon the equivalent cash
compensation accrued divided by the closing stock price on March 31, 2009. The
closing stock price on March 31, 2009 was $0.34 resulting in compensation of
68,480 shares to each of the two directors. These shares were issued on July 29,
2009. The two directors also chose to be compensated with common stock for the
period April 1 to June 30, 2009. The number of shares was to be determined based
upon the cash compensation accrued divided by the closing stock price on June
30, 2009. The closing stock price on June 30, 2009 was $0.27 resulting in
compensation of 23,150 shares to each of the two directors. These shares have
not been issued as of the date of these financial statements. The Company
recorded stock-based compensation related to the common stock earned for the six
months and three months ended June 30, 2009 of $25,000 and $12,500,
respectively.


8.     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 under recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition.

Federal and state income tax returns for the years ended December 31, 2008,
2007, 2006 and 2005 are subject to review by the taxing authorities.


                                       12
<PAGE>


The Company's policy is to classify assessments, if any, for tax related
interest as interest expenses and penalties as general and administrative
expenses. The Company has evaluated and concluded that there are no uncertain
tax positions requiring recognition in the Company's financial statements.


9.     Related Party Transactions

In July, 2008, the Company retained an accounting firm in which an officer and
director is a partner to perform accounting and administrative services. During
the six months and three months ended June 30, 2009, the Company paid this firm
$19,463 and $6,000, respectively.

The Company entered into an Investment Banking Advisory Services agreement in
November, 2007. The Company extended this agreement indefinitely in April 2009.
The agreement as modified may be terminated by either party upon 30-days written
notice. The Company advanced $25,000 to the Investment Banking firm in December
2007 for its expenses. The Company recorded for the six months and three months
ended June 30, 2009 general and administrative expense of $15,122 and $0,
respectively, for legal expenses presented against this advance. The remaining
$9,878 was repaid to the Company in April 2009. There have been no other
payments or fees earned as a result of this agreement. The Company also has a
money market account with this Investment Banking Firm, invested in short-term
federal securities, with a balance of $2,496,549 at June 30, 2009. The Chief
Executive Officer and director of the Company is the Chief Executive Officer and
a director of the Investment Banking firm. Another officer and director of the
Company is a managing director of the same Investment Banking firm.


10.    Fair Value of Financial Instruments

     In September 2006, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 157, Fair Value Measurements, which defines the fair value, establishes
a framework for measuring fair value and expands disclosures about fair value
measurements. This statement is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. On February 12, 2008, the FASB issued FASB Staff Position ("FSP")
No. 157-2 which defers the effective date of SFAS No. 157 for one year for
non-financial assets and non-financial liabilities that are not recognized or
disclosed at fair value in the financial statements on a recurring basis. Our
adoption of SFAS No. 157 on January 1, 2008 did not have a material impact on
the Company's financial position, results of operations or cash flows.

     The carrying value of accounts receivable, cash accounts, other current
assets, accounts payable, deferred rent, and accrued liabilities are considered
to be representative of their respective fair values because of the short-term
nature of those instruments.

     In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to
choose to measure at fair value many financial instruments and certain other
items that are not currently required to be measured at fair value. Subsequent
changes in fair value for designated items will be required to be reported in
earnings in the current period. SFAS No. 159 also establishes presentation and
disclosure requirements for similar types of assets and liabilities measured at
fair value. SFAS No. 159 is effective for fiscal years beginning after November
15, 2007. As permitted by SFAS No. 159, we have elected not to use the fair
value option to measure our available-for-sale securities under SFAS No. 159 and
will continue to report under SFAS No. 115, Accounting for Certain Investments
in Debt and Equity Securities. We have made this election because the nature of
our financial assets and liabilities are not of such complexity that they would
benefit from a change in valuation to fair value.


                                       13
<PAGE>


11.    Commitments and Contingencies

Lease

As of June 30, 2009, the Company was committed for future minimum rent under the
lease for its former manufacturing, warehouse and administrative space, net of
sublease income, plus subsidy payments by the Company to the sublessor, through
December 31, 2010. The present value of the future minimum rent under the lease,
net of sublease income, was charged to general and administrative expenses in
connection with the Company's continuing operations. The minimum payments are as
follows:

                                                                Sublease
                                                             net of sublease
                                                                subsidy
                                          Lease                 payments                 Net
                                         ------------------------------------------------------

July 1 through December 31, 2009         $ 47,700               $ 35,700               $ 12,000
2010                                       97,875                 73,875                 24,000
                                         ------------------------------------------------------

                                         $145,575               $109,575               $ 36,000
                                         ======================================================

Other

The Company is subject to claims arising in the ordinary course of business. On
January 8, 2009, a complaint was filed in Superior Court of California, County
of Sacramento in which the Company was named as a co-defendant in a matter
involving an automobile accident. The plaintiffs are seeking damages for pain &
suffering, emotional distress, past and future medical expenses and past and
future loss of earnings totaling approximately $30,000,000. The Company has not
recorded any amount as a liability on its balance sheet at June 30, 2009 for
this claim. The Company believes the demands are totally without merit and
intends to vigorously defend the complaint. There are 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
operations or cash flows.

12.    Subsequent Event

On July 29, 2009 the Company issued a total of 139,960 shares of its common
stock to two directors as compensation for services performed as members of its
Board of Directors from April 25, 2008 through March 31, 2009 (Note 9).

For the period ended June 30, 2009, the subsequent events assessment was
performed through August 11, 2009. This was the date on which the company's
board of directors approved these financial statements.


                                       14

<PAGE>


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

Forward-Looking Statements

The discussion in this Quarterly Report on Form 10-Q 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 and certain assumptions
made by the Company's management. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," "could," "would," "may,"
"on target," "envisions," 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-K, Quarterly Reports on Form 10-Q 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-Q 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-K for the fiscal year ended December 31, 2008 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.

After the sale of substantially all of our assets on June 28, 2007, the Company
became inactive. The Company has no employees and all services are provided by
contracted personnel.

Our operations are limited to raising additional funds to be used to maintain
our public company status and for a business combination if a suitable candidate
is located. Our stockholders approved the future liquidation of the Company if
we were unable to complete an acquisition or similar transaction by June 28,
2008. Our stockholders also granted the Board of Directors authority to abandon
any decision to liquidate without further stockholder action if it determined
the liquidation was not in the best interests of the Company or our
stockholders. The Board of Directors has decided it is in the best interest of
the Company and its stockholders to not liquidate.

For the six months and three months ended June 30, 2009, our general and
administrative expenses consisted primarily of our continuing expenses to
maintain our public company status, the cost to maintain a lease agreement for
the facility we used while we were an operating company offset by a sublease for
the same space. We retained the lease obligation as part of the sale of
substantially of our assets. The sublease agreement provides for the sublessee
to pay our lessor each month for the rent owed by us under our lease through
December 31, 2010, the duration of the lease term. As an incentive to agree to
the sublease, we have agreed to pay the sublessor $2,000 each month our rent is
paid.

Results of Operations

Six Months Ended June 30, 2009 and 2008

For the six months ended June 30, 2009 and 2008 we had a net loss of $190,461
and $4,547, respectively. General and administrative expenses were $216,193 and
$39,742 for the six months ended June 30, 2009 and 2008, respectively. General
and administrative expenses were offset for the six months ended June 30, 2008


                                       15

<PAGE>


by the effect of an approximately $212,000 reduction in deferred rent from a
sublease agreement with a company to lease office space from us. Legal fees
decreased by approximately $32,000 from the six months ended June 30, 2008 to
June 30, 2009 due to an effort to control our costs. Business Insurance
decreased approximately $15,000 from the six months ended June 30, 2008 to June
30, 2009 due to a change in an insurance policy in an effort to control our
costs. Net interest income was $24,280 and $35,195 for the six months ended June
30, 2009 and 2008, respectively. The decrease of approximately $11,000 was due
to a general decline in interest rates and less funds in interest-bearing cash
and securities.

Three Months Ended June 30, 2009 and 2008

For the three months ended June 30, 2009 and 2008 we had a net loss of $65,363
and net profit of $137,298, respectively. General and administrative expenses
were $82,772 and ($120,243) for the three months ended June 30, 2009 and 2008,
respectively. General and administrative expenses were offset for the six months
ended June 30, 2008 by the effect of an approximately $212,000 reduction in
deferred rent from a sublease agreement with a company to lease office space
from us. Legal fees decreased by approximately $34,000 from the three months
ended June 30, 2008 to June 30, 2009 due to an effort to control our costs.
Accounting and accounting consulting fees increased by approximately $12,000 for
the three months ended June 30, 2009 and 2008, due to an increase in cost for
services. Net interest income was $14,543 and $17,055 for the three months ended
June 30, 2009 and 2008, respectively. The decrease of approximately $3,000 was
due to less total funds in interest-bearing cash and securities offset by a
higher percentage of funds being invested in bonds yielding a higher return than
funds deposited in a savings account.


Liquidity and Capital Resources

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

At June 30, 2009 and December 31, 2008, our "quick ratio" (cash divided by
current liabilities), a conservative liquidity measure designed to predict our
ability to pay bills, was 27.32 and 50.96, respectively.

We anticipate that we will incur operating losses from continuing operations in
the next twelve months, until we enter into a business combination or until our
liquidation.

Cash used in operating activities was $107,977 and $137,634 for the six months
ended June 30, 2009 and 2008, respectively. Cash used in operating activities
for the six months ended June 30, 2009 was due primarily to our net loss of
$190,461 and a decrease in deferred rent of $11,062 offset by adding back
non-cash expenses of $15,060 and a decrease in other current assets of $43,582.
Cash used in operating activities for the six months ended June 30, 2008 was due
primarily to our net loss of $4,547, a decrease in deferred rent of $206,415 and
a decrease in income taxes payable of $31,482 offset by an increase in accounts
payable of $57,617 and decrease in other current assets of $38,499.

Cash used in investing activities for the six months ended June 30, 2009 of
$404,011 was from the sale of available-for-sale securities of $1,610,650 offset
by the purchase of available-for-sale securities of $2,014,661.

Cash provided by financing activities for the six months ended June 30, 2008 was
$1,691,742 and was due to the net proceeds as a result of the April 2008 sale of
common stock.


                                       16

<PAGE>


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 Company's discussion and analysis of the financial condition and results of
operations are based upon the Company's unaudited financial statements included
elsewhere in this Form 10-Q and has been prepared in accordance with accounting
principles generally accepted in the United States of America as disclosed in
our annual financial statements in our Form 10-K for the year ended December 31,
2008. Interim results are not necessarily indicative of the results for a full
year.

Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position,
operating results or cash flows due to changes in U.S. interest rates. Our
exposure to market risk is confined to our cash and available-for-sale
investments that we expect to hold less than one year. The goals of our cash
investment policy are the security of the principal invested and fulfillment of
liquidity needs. We currently do not hedge interest rate exposure. Because of
the short-term nature of our investments, we do not believe that an increase in
market rates would have any material negative impact on the value of our
investment portfolio.

As of June 30, 2009, we held $2,810,370 in money market, savings and checking
accounts at three financial institutions. The Company has a checking account and
savings accounts at one major banking institution with combined balances of
$277,822 at June 30, 2009. The Company has a savings account in another major
banking institution with a balance of $36,000 at June 30, 2009. These accounts
are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to
$250,000 per institution. The Company has a money market account in a brokerage
account with a third financial institution, invested in fixed-income securities,
with a balance of $2,496,549 at June 30, 2009. The funds in the money market at
this institution are guaranteed by the Securities Investor Protection
Corporation (SIPC) up to $500,000. The Company had total uninsured funds at June
30, 2009 of $2,024,371.


Item 4T. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management has established and maintains a system of disclosure controls and
procedures designed to provide reasonable assurance that information required to
be disclosed by us in the reports filed or submitted by us under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms, and include controls and procedures designed to provide reasonable
assurance that information required to be disclosed by us in those reports is
accumulated and communicated to our management, including our Chief Executive
Officer and our Chief Financial Officer (our principal executive officer and


                                       17

<PAGE>


principal financial officer, respectively), as appropriate to allow timely
decisions regarding required disclosure. As of June 30, 2009, our management,
including our Chief Executive Officer and our Chief Financial Officer, conducted
an evaluation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective to provide reasonable
assurance that the information required to be disclosed by us in the reports we
file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
All disclosure control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation.

(b) Changes in Internal Controls

There were no changes in internal control during the six-month period ended June
30, 2009. Management has not identified any matters that constitute material
weaknesses (as defined under the Public Company Accounting Oversight Board
Auditing Standard) in our internal controls over financial reporting.


Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

On January 8, 2009, a complaint was filed in Superior Court of California,
County of Sacramento in which the Company was named as a co-defendant in a
matter involving an automobile accident. The plaintiffs are seeking damages for
pain & suffering, emotional distress, past and future medical expenses and past
and future loss of earnings totaling approximately $30,000,000. The Company
believes the demands are totally without merit and intends to vigorously defend
the complaint. To the best of the Company's knowledge, there are no other
proceedings or litigation currently threatened or proceeding against us or
threatening us.

From time to time, the Company may be party to other claims and litigation
arising in the ordinary course of business. The Company does not believe that
any adverse final outcome of any of these matters, whether or not covered by
insurance, would have a material adverse effect on the Company.

The Company is subject to various legal proceedings and claims arising in the
ordinary course of business. There are 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 6.   Exhibits

Pursuant to the rules and regulations of the SEC, we have filed certain
agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements
may contain representations and warranties by the parties. These representations
and warranties have been made solely for the benefit of the other party or
parties to such agreements and (i) may have been qualified by such disclosures
made to such other party or parties, (ii) were made only as of the date of such
agreements or such other date(s) as may be specified in such agreements and are
subject to more recent developments, which may not be fully reflected in our
public disclosure, (iii) may reflect the allocation risk among the parties to
such agreements and (iv) may apply materiality standards different from what may
be viewed as material to investors. Accordingly, these representations and
warranties may not describe our actual state of affairs at the date hereof and
should not be relied upon.


                                       18
<PAGE>


Exhibit No.       Description
-----------       -----------

3.1               Articles of Incorporation (1)

3.2               By-laws (1)

31.1              Certification Pursuant to Exchange Act Rule 13a-14(a) of
                  Christopher A. Marlett *

31.2              Certification Pursuant to Exchange Act Rule 13a-14(a) of
                  Michael J. Tomczak *

32.1              Certification Pursuant to Section 1350 of the Sarbanes-Oxley
                  Act of 2002 of Christopher A. Marlett *

32.2              Certification Pursuant to Section 1350 of the Sarbanes-Oxley
                  Act of 2002 of Michael J.  Tomczak *

          (1)  Incorporated by reference to Form SB-2 filed on July 30, 1996 *
               Filed herewith


                                       19
<PAGE>



                                   SIGNATURES

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


                                     INTEGRATED SURGICAL SYSTEMS, INC.


                                     By: /s/ Michael J. Tomczak
                                        ---------------------------------------
                                     Michael J. Tomczak, Chief Financial Officer


Dated:  August 12, 2009



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