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 September 30, 2005

[ ]  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 Identification No.)
    incorporation or organization)

                  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 [ ] No [ X ]

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

The number of shares of common stock, $0.01, par value, outstanding on March 31,
2007 was 45,784,089.

Transitional Small Business Disclosure format (check one). Yes [ ] No [ X ]

<PAGE>

                        Integrated Surgical Systems, Inc.
                                   Form 10-QSB
                    for the quarter ended September 30, 2005
                                Table of Contents


                                                                            Page
                                                                            ----
Part I.   Financial Information

          Item 1.  Financial Statements                                        2

                   Balance Sheet (unaudited) at September 30, 2005             2

                   Statements of Operations (unaudited) for the three
                   months ended September 30, 2005 and 2004                    3

                   Statements of Operations (unaudited) for the nine
                   months ended September 30, 2005 and 2004                    4

                   Statements of Cash Flows (unaudited) for the nine
                   months ended September 30, 2005 and 2004                    5

                   Notes to Financial Statements (unaudited)                   6

          Item 2.  Management's Discussion and Analysis                        8

          Item 3.  Controls and Procedures                                    12

Part II.  Other Information

          Item 6.  Exhibits                                                   12

Signature                                                                     13

Certifications                                                                14


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Part I. Financial Information

     Item 1. Financial Statements (unaudited)


                              Integrated Surgical Systems, Inc.
                                        Balance Sheet
                                     September 30, 2005
                                         (Unaudited)

Assets
Current assets:
     Cash                                                                       $     31,442
     Accounts receivable                                                              38,956
     Inventory                                                                       463,138
     Other current assets                                                             15,283
                                                                                ------------
Total assets                                                                    $    548,819
                                                                                ============

Liabilities and stockholders' deficit
Current liabilities:
     Accounts payable                                                           $  1,732,492
     Accrued payroll and related expenses                                            950,743
     Accrued liabilities                                                             165,834
     Unearned income                                                               1,003,944
     Derivative liability                                                            452,778
                                                                                ------------
Total current liabilities                                                          4,305,791

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                                                                  4,474,287
                                                                                ------------

Stockholders' deficit:
     Common stock, $0.01 par value, 100,000,000 shares authorized;
         45,084,089 shares issued and outstanding                                    450,841
     Additional paid-in capital                                                   61,924,486
     Accumulated deficit                                                         (66,300,795)
                                                                                ------------
Total stockholders' deficit                                                       (3,925,468)
                                                                                ------------
                                                                                $    548,819
                                                                                ============

See accompanying notes to financial statements.

                                              2
<PAGE>

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



                                                          Three months ended September 30,
                                                          --------------------------------
                                                                2005            2004
                                                            ------------    ------------
Net revenue                                                 $    293,577    $    139,140
Cost of revenue                                                   18,172         135,501
                                                            ------------    ------------
                                                                 275,405           3,639
                                                            ------------    ------------
Operating expenses:
     Selling, general and administrative                         119,898         240,573
     Research and development                                     22,241          92,741
                                                            ------------    ------------
                                                                 142,139         333,314
                                                            ------------    ------------
Operating income (loss)                                          133,266        (329,675)

Derivative liability expense                                    (302,778)           --
Interest income (expense) net                                     (2,558)         (3,186)
                                                            ------------    ------------
Net loss                                                    $   (172,070)   $   (332,861)
                                                            ============    ============


Basic and diluted loss per common share                     $       *       $      (0.01)
                                                            ============    ============

Shares used in computing basic and diluted loss per share     45,084,089      44,955,408
                                                            ============    ============

*  Less than $.01



See accompanying notes to financial statements.

                                            3

<PAGE>

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



                                                              Nine months ended September 30,
                                                              -------------------------------
                                                                   2005            2004
                                                               ------------    ------------
Net revenue                                                    $  3,384,871    $  1,389,013
Cost of revenue                                                     480,800         693,931
                                                               ------------    ------------
                                                                  2,904,071         695,082
                                                               ------------    ------------
Operating expenses:
     Selling, general and administrative                            670,590         923,858
     Research and development                                       297,590         811,224
     Gain on forgiveness of debt                                   (362,881)           --
                                                               ------------    ------------
                                                                    605,299       1,735,082
                                                               ------------    ------------
Operating income (loss)                                           2,298,772      (1,040,000)

Amortization of discount                                            (31,379)           --
Derivative liability expense                                       (271,399)           --
Interest income (expense) net                                        (9,318)         (5,133)
                                                               ------------    ------------
Net income (loss)                                              $  1,986,676    $ (1,045,133)
                                                               ============    ============


Basic net income (loss) per common share                       $       0.04    $      (0.02)
                                                               ============    ============
Diluted net income (loss) per common share                     $       0.03    $      (0.02)
                                                               ============    ============

Shares used in computing basic net income (loss) per share       45,084,089      44,924,130
                                                               ============    ============
Shares used in computing diluted net income (loss) per share     60,162,988      44,924,130
                                                               ============    ============


See accompanying notes to financial statements.

                                             4
<PAGE>

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


                                                               Nine months ended September 30,
                                                               -------------------------------
                                                                     2005           2004
                                                                 -----------    -----------
Cash flows from operating activities:
Net income (loss)                                                $ 1,986,676    $(1,045,133)
Adjustments to reconcile net income (loss) to net cash used in
   operating activities:
     Depreciation                                                      5,414         18,039
     Inventory reserve                                               100,000           --
     Gain on forgiveness of debt                                    (362,881)          --
     Derivative liability expense                                    302,778           --
     Stock-based compensation                                           --           21,200
     Loss on disposal of fixed assets                                   --            4,829
     Changes in operating assets and liabilities:
        Accounts receivable                                           19,613       (219,192)
        Inventory                                                     83,072       (121,636)
        Other current assets                                          16,620         80,948
        Accounts payable                                             (78,568)       388,781
        Accrued payroll and related expenses                        (355,987)       676,580
        Accrued liabilities                                          (95,815)        79,365
        Unearned income                                           (2,913,883)      (129,182)
                                                                 -----------    -----------
Net cash used in operating activities                             (1,292,961)      (245,401)
                                                                 -----------    -----------

Cash flows from investing activities:
Proceeds from disposal of property and equipment                        --            4,600
                                                                 -----------    -----------
Net cash provided by investing activities                               --            4,600
                                                                 -----------    -----------

Cash flows from financing activities:
Proceeds from exercise of stock options                                 --            1,954
Proceeds from officer advances and deferrals of salaries and
  unreimbursed travel expenses                                          --          180,799
Payments of officer advances and deferrals of salaries and
  unreimbursed travel expenses                                          --          (60,200)
                                                                 -----------    -----------
Net cash provided by financing activities                               --          122,553

                                                                 -----------    -----------
Net decrease in cash                                              (1,292,961)      (118,248)
Cash at beginning of period                                        1,324,403        142,909
                                                                 -----------    -----------
Cash at end of period                                            $    31,442    $    24,661
                                                                 ===========    ===========


See accompanying notes to financial statements.

                                              5
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<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 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.
Subsequent to March 31, 2005 the Company ceased operations, three of its four
directors resigned, and all employees were terminated. The officers of the
Company were evaluating the options available to the Company.

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 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. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the financial position, results of operations and cash flows for the interim
periods 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, 2004. Interim results are not necessarily indicative
of the results for a full year.

Certain amounts for prior years have been reclassified to conform to 2005
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.

Derivative Liabilities

Derivative liabilities consisted of: (a) the embedded conversion feature
bifurcated from the June 9, 2004 convertible note payable and (b) the warrants
in connection with the convertible notes payable. The value of the derivative
liabilities are recorded first as a discount on the convertible notes payable
and the excess is charged to operations. The discount is being amortized over
the term of the note. The derivative liabilities are adjusted quarterly to
reflect changes in fair value.

The Company uses the Black-Scholes option price model to value the embedded
conversion and the detachable warrants that are recorded as a derivative
liability. In valuing the embedded conversion feature and the detachable
warrants, at the time they were issued and quarterly thereafter, the Company
used the market price of our common stock on the date of valuation, an expected
dividend yield of zero, the remaining period or maturity date of the convertible
debt feature or detachable warrants and the expected volatility of our common
stock.

Stock-Based Compensation

Compensation costs for common stock issued to employees were based on the fair
value method and deferred as shareholders' equity until amortized to operations.

                                       6
<PAGE>

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. Going Concern

The accompanying unaudited financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As of September 30, 2005, the
Company had an accumulated deficit of $66,300,795 and negative working capital
of $3,756,972. The report of the independent registered public accounting firm
on the Company's December 31, 2004 financial statements includes an explanatory
paragraph indicating there is substantial doubt about the Company's ability to
continue as a going concern.

The Company believes that it has a current plan to address these issues in order
to enable the Company to continue operations. This plan includes obtaining
additional equity or debt financing, increasing product sales in existing
markets, increasing sales of system upgrades, and further reductions in
operating expenses as necessary. Although the Company believes that the plan
will be realized, there is no assurance that these events will occur. In the
event that the Company is unsuccessful in realizing the benefits of such plan,
it is possible that the Company will seek bankruptcy protection. These financial
statements do not include any adjustments to reflect the uncertainties related
to the recoverability and classification of assets or the amounts and
classification of liabilities that may result from an inability of the Company
to continue as a going concern.

4. Stock-Based Compensation

Effective January 1, 2005, the Company adopted the modified prospective
transition method under FAS 123(R), Share Based Payments, and, accordingly,
prior period results have not been retroactively adjusted, as no stock options
granted prior to January 1, 2005, had unexpired service periods. The modified
prospective transition method requires that stock based compensation expense be
recorded for all new shares, options, warrants, etc. granted on or after January
1, 2005 be based on the fair value on the grant date determined under the
provisions of FAS 123(R).


                                        7
<PAGE>

The following table illustrates the pro forma effects on net income and net
income per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123 to stock-based compensation for the two years ended
December 31:

                                                   2004           2003
                                               -----------    -----------

Net loss, as reported                          $  (556,262)   $(3,250,219)

Add: Stock-based employee compensation costs
included in net loss                                21,200           --

Deduct: Stock-based employee compensation
expense determined under a fair value method       (11,104)      (112,444)
                                               -----------    -----------
Proforma net loss                              $  (546,166)   $(3,362,663)
                                               ===========    ===========
Net loss per share:
  Basic and diluted - as reported              $     (0.01)   $     (0.08)
                                               ===========    ===========
  Basic and diluted- pro forma                 $     (0.01)   $     (0.08)
                                               ===========    ===========


     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, 2004 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 have not
received clearance to market the ROBODOC(R) System (ROBODOC) in the U.S., we are
permitted to export the system provided certain requirements are 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 sell our robotic systems to international
distributors, who in turn resell the product in their territories. Our
international distributors are Imatron (KTEC) in Japan, ROCOM Frontier in Korea
and Paramount Impex in India.

                                       8
<PAGE>

On June 10, 2005 we filed an 8-K with the SEC disclosing that we had ceased
operations, two of the three outside directors had resigned, all employees were
terminated and our officers were evaluating all options available, including
securing additional capital, the sale of assets and the seeking of protection
under the Federal Securities Laws. On July 11, 2005, the third outside director
resigned, leaving Ramesh C. Trivedi as the only director.

On December 17, 2005 we moved from a leased 15,000 square foot site at 1850
Research Park Drive in Davis, California to a leased 4,800 square foot site at
6220 Belleauwood Lane, Sacramento, California and on December 1, 2006 we moved
to a leased 11,200 square foot site at 1433 N. Market Blvd., Suite 1,
Sacramento, California, 95834 where we currently operate under a four year
lease.

In November 2005, we received an advance for a Robodoc system from our Korean
distributor and this system was shipped in January 2006. In February 2006, we
received an advance for another Robodoc system from our Korean distributor and
this system was shipped in March 2006.

On August 8, 2006, we filed Form 8-K with the SEC disclosing that we had entered
into a $4 million asset purchase agreement to sell substantially all of our
assets to Novatrix Biomedical, Inc. in consideration of $4 million as well as a
loan agreement with Novatrix pursuant to which Novatrix would loan us an
aggregate of $6 million in two tranches of $2.7 million upon the execution of
the agreement, and an additional $3.3 million in two tranches upon certain
milestones with Novatrix. As required by the loan agreement, we have reached a
settlement with over 80% of our outstanding creditors in exchange for 17.6 cents
for each dollar owed. The loan agreement further provides that in the event that
approval by our stockholders of the asset sale does not occur by June 30, 2007,
we will be required to grant an exclusive license in the Asian markets of our
ROBODOC Surgical System software to Novatrix in exchange for a one-time royalty
payment of $100,000.

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

We currently have no outstanding warranties on our products.

Results of operations

We incurred a net loss for the third quarter of 2005 of $172,000 or $0.00 per
basic and diluted share compared to a net loss for the third quarter of 2004 of
$333,000 or $0.01 per basic and dilutive share.

We generated net income for the first nine months of 2005 of $1,987,000 or $0.04
per basic share and $0.03 per dilutive share compared to a net loss for the
first nine months of 2004 of $1,045,000 or $0.02 loss per basic and dilutive
share.

Net revenue

Net revenue of $294,000 in Q3 2005 increased 112% when compared to $139,000 in
the third quarter of 2004, primarily resulting from $198,000 of development
revenue. There were no Robodoc systems sold in Q3 2005 or Q3 2004.

Net revenue of $3,385,000 in the first nine months of 2005 increased 144% when
compared to $1,389,000 in the first nine months of 2004, primarily resulting
from $2,994,000 of development revenue. There were no Robodoc systems sold in
the first nine months of 2005, as compared to two Robodoc system sold in the
first nine months of 2004.

                                       9
<PAGE>

Cost of revenue

Cost of revenue of $18,000 in Q3 2005 decreased 87% when compared to $136,000 in
the third quarter of 2004 and was 6% of revenue compared to 97% of revenue in
the third quarter of 2004 as the costs of development revenue in Q3 2005 are
substantially less than costs of other sales. During 2004, we reduced our
workforce and operating costs and, as a result, manufacturing expenses and
overhead expenses decreased.

Cost of revenue of $481,000 in the first nine months of 2005 decreased 31% when
compared to $694,000 in the first nine months of 2004 and was 14% of revenue
compared to 50% of revenue in the first nine months of 2004 as the costs of
development revenue in the first nine months of 2005 is substantially less than
other sales. During 2004, we reduced our workforce and operating costs and, as a
result, manufacturing expenses and overhead expenses decreased.

Gross margin

Gross margin of $275,000 increased 6,775% during Q3 of 2005 when compared to
$4,000 in the third quarter of 2004 and were 94% of revenue compared to 3% of
revenue in the third quarter of 2004 as 67% of the revenues in Q3 2005 were from
higher margins on development revenues compared to other sales in Q3 2004.

Gross margin of $2,904,000 increased 318% during the first nine months of 2005
when compared to $695,000 in the first nine months of 2004 and were 86% of
revenue compared to 50% of revenue in the first nine months of 2004 as 88% of
the revenues in the first nine months of 2005 were from higher margins on
development revenues compared to other sales in the first nine months of 2004.

Operating expenses

Selling, general and administrative expenses of $120,000 decreased 50% during
the third quarter of 2005 when compared to $241,000 in the third quarter of 2004
and were 41% of revenue compared to 173% of revenue in the third quarter of
2004. During 2004, we reduced our workforce and operating costs and, in 2005, we
ceased operations and all our employees were terminated.

Selling, general and administrative expenses of $671,000 decreased 27% during
the first nine months of 2005 when compared to $924,000 in the first nine months
of 2004 and were 20% of revenue compared to 67% of revenue in the first nine
months of 2004. During 2004, we reduced our workforce and operating costs and,
as a result, operating expenses decreased.

Research and development of $22,000 decreased 76% during the third quarter of
2005 when compared to $93,000 in the third quarter of 2004 due to our lack of
cash to maintain our level of research and development.

Research and development of $298,000 decreased 63% during the first nine months
of 2005 when compared to $811,000 in the first nine months of 2004 due to our
lack of cash to maintain our level of research and development.

Derivative liability expense

Derivative liability expense of $303,000 for the third quarter of 2005 resulted
from the application of the mark to market requirements of FAS 133.

Derivative liability expense of $271,000 for the first nine months of 2005
resulted from the application of the mark to market requirements of FAS 133.

Liquidity and Capital Resources

Our cash position is inadequate, and although we have identified potential
sources of cash for future operations, there cannot be any assurance that we
will receive these cash amounts, or that these cash amounts will be sufficient

                                       10
<PAGE>

to assure continuing operations. The report of independent auditors on our
December 31, 2004 financial statements included an explanatory paragraph
indicating there is substantial doubt about our ability to continue as a going
concern. We believe that we have a current plan to address these issues and
enable us to continue operations. This plan includes obtaining additional equity
or debt financing, increasing product sales in existing markets, increasing
sales of system upgrades, and further reductions in operating expenses as
necessary. Although we believe that the plan will be realized, there is no
assurance that these events will occur. In the event that we are unsuccessful in
realizing the benefits of such plan, it is possible that we will seek bankruptcy
protection. The September 30, 2005 unaudited financial statements do not include
any adjustments to reflect the uncertainties related to the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from our inability to continue as a going concern.

At September 30, 2005, our "quick ratio" (cash and accounts receivable divided
by current liabilities), a conservative liquidity measure designed to predict
our ability to pay bills, was only 0.02. It has been difficult for us to meet
obligations, including payroll, as they come due, and we expect this situation
to continue through 2005.

Net cash used in operating activities was $1,293,000 for the nine months ended
September 30, 2005, resulted primarily from decreases in unearned income of
$2,914,000 and, the forgiveness of debt of $363,000, providing no cash, offset
in part by net income of $1,987,000.

The decrease in accounts payable was primarily due to the reimbursement of
business expenses incurred by officers and employees over the past several
years. The decrease in accrued payroll and other related expenses was primarily
from payments made for past due payrolls from 2004 and related accrued benefits.
The decrease in unearned income primarily is from the recognition of revenue on
development projects and the recognition of income on servicing contracts.

We expect to derive most of the cash required to support our operations in 2005
through sales of the ROBODOC Systems and collection of accounts receivable, as
well as through additional financing. It is critical for us to maintain
operations as a going concern in 2005. There can be no assurance that we can
continue to convert inventory, collect receivables or raise additional funds on
acceptable terms, if at all.

At September 30, 2005, we have amounts due to our executive officers of
approximately $756,000 in the aggregate, deferred salaries and unreimbursed
travel expenses. Approximately $470,000 and $16,000 are included in accrued
payroll and related expenses, and accounts payable, respectively, and are due to
Ramesh C. Trivedi, our president and chief executive officer. Approximately
$152,000 and $2,000 are included in accrued payroll and related expense, and
accounts payable respectively, due to Leland Witherspoon, our vice president of
research and development. Approximately $116,000 is included in accrued payroll
due to Charles J. Novak, our chief financial officer.

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

We do not have any material commitments for capital expenditures.

There are no seasonal aspects to our business.

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.

                                       11
<PAGE>

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 affect our more
significant judgments and estimates used in the preparation of our financial
statements:

     We recognize 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 are 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 are recognized after customer acceptance, which generally
     occurs after the completion of installation and training. Revenue related
     to maintenance and service contracts is recognized ratably over the
     duration of the contracts.

     We periodically evaluate the need for allowances for doubtful accounts for
     estimated losses resulting from the inability of our customers to make
     required payments. If the financial condition of our customers were to
     deteriorate, resulting in an impairment of our ability to make payments,
     additional allowances may be required.

Item 3. Controls and Procedures

(a) Under the supervision and with the participation of management, including
our President and 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
President and 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.

(b) There has been no significant changes in our internal control over financial
reporting during the quarter ended September 30, 2005 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.


Part II. Other Information

Item 6. Exhibits

(a) Exhibits

31.1 Certification Pursuant to Exchange Act Rule 13a-14(a) of Ramesh Trivedi

31.2 Certification Pursuant to Exchange Act Rule 13a-14(a) of David Adams

32.1 Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of
Ramesh Trivedi

32.2 Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of
David Adams

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<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


 April 13, 2007







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