<PAGE>   1
                     U.S. 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 March 31, 2001.

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO ____________.



                         Commission file number 1-11900



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



<TABLE>
<S>                                                                          <C>
                             DELAWARE                                                     75-2422983
  (State or other jurisdiction of incorporation or organization)             (I.R.S. Employer Identification No.)



          8200 SPRINGWOOD DRIVE, SUITE 230, IRVING, TEXAS                                    75063
             (Address of principal executive offices)                                     (Zip Code)
</TABLE>



                                 (972) 444-8280
                           (Issuer's telephone number)



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

As of April 30, 2001, 10,732,417 shares of the Registrant's common stock were
outstanding.

Transitional Small Business Disclosure Format: Yes [ ] No [X]




                                  Page 1 of 15
<PAGE>   2



                        INTEGRATED SECURITY SYSTEMS, INC.
                                      INDEX

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----

<S>                                                                                   <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Consolidated Balance Sheets at March 31, 2001 (unaudited)
                           and June 30, 2000                                            3

                  Consolidated Statements of Operations (unaudited) for the three
                           and nine months ended March 31, 2001 and 2000                4

                  Consolidated Statements of Cash Flows (unaudited) for the nine
                           months ended March 31, 2001 and 2000                         5

                  Notes to Financial Statements                                         6

         Item 2.  Management's Discussion and Analysis or Plan of Operation             8

PART II.  OTHER INFORMATION

         Item 1.  Legal Proceedings                                                    12

         Item 2.  Changes in Securities                                                12

         Item 3.  Defaults Upon Senior Securities                                      12

         Item 4.  Submission of Matters to a Vote of Security Holders                  12

         Item 5.  Other Information                                                    12

         Item 6.  Exhibits and Reports on Form 8-K                                     12

SIGNATURES                                                                             14
</TABLE>






                                  Page 2 of 15
<PAGE>   3


                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

                        INTEGRATED SECURITY SYSTEMS, INC.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                    March 31,           June 30,
                                                                                      2001                2000
                                                                                   ------------       ------------
                                                                                   (Unaudited)
                                ASSETS
<S>                                                                                <C>                <C>
Current assets:
   Cash and cash equivalents                                                       $     79,178       $     99,636
   Accounts receivable, net of allowance for doubtful
     accounts of $94,214 and $58,847, respectively                                    1,078,478          1,201,491
   Inventories                                                                          591,200            585,486
   Notes receivable                                                                          --             28,546
   Unbilled receivables                                                                  30,572            252,567
   Other current assets                                                                 124,689            112,718
                                                                                   ------------       ------------
     Total current assets                                                             1,904,117          2,280,444

Property and equipment, net                                                             840,558            921,695
Capitalized software development costs, net                                                  --            113,713
Other assets                                                                             16,411             16,898
                                                                                   ------------       ------------
     Total assets                                                                  $  2,761,086       $  3,332,750
                                                                                   ============       ============

                 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Accounts payable                                                                $  1,026,529       $    582,717
   Accrued liabilities                                                                  488,196            440,072
   Current portion of long-term debt                                                  8,067,824          6,135,260
                                                                                   ------------       ------------
     Total current liabilities                                                     $  9,582,549       $  7,158,049
                                                                                   ------------       ------------

Long-term debt                                                                          649,747            728,331

Stockholders' deficit:
   Preferred stock, $.01 par value, 750,000 shares authorized;
     102,250 shares issued and outstanding (liquidation value
     of $2,045,000)                                                                       1,023              1,023
   Common stock, $.01 par value, 35,000,000 shares
     authorized; 10,782,417 and 10,564,145 shares,
     respectively, issued; and 10,732,417 and 10,514,145
     shares, respectively, outstanding                                                  107,824            105,641
   Additional paid in capital                                                        14,609,314         14,502,963
   Accumulated deficit                                                              (22,070,621)       (19,044,507)
   Treasury stock, at cost - 50,000 shares                                             (118,750)          (118,750)
                                                                                   ------------       ------------
     Total stockholders' deficit                                                     (7,471,210)        (4,553,630)
                                                                                   ------------       ------------
       Total liabilities and stockholders' deficit                                 $  2,761,086       $  3,332,750
                                                                                   ============       ============
</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                  Page 3 of 15
<PAGE>   4



                        INTEGRATED SECURITY SYSTEMS, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)


<TABLE>
<CAPTION>
                                            For the Three Months Ended            For the Nine Months Ended
                                                    March 31,                            March 31,
                                         -------------------------------       -------------------------------
                                             2001               2000               2001               2000
                                         ------------       ------------       ------------       ------------

<S>                                      <C>                <C>                <C>                <C>
Sales                                    $  1,208,643       $  1,509,601       $  3,770,495       $  4,977,783
Cost of sales                                 765,521          1,131,576          2,555,292          3,328,342
                                         ------------       ------------       ------------       ------------
Gross margin                                  443,122            378,025          1,215,203          1,649,441
                                         ------------       ------------       ------------       ------------

Operating expenses:
   Selling, general and administrative
   Research and product development           969,095          1,251,366          3,066,997          3,610,550
                                              106,651             88,293            395,731            280,246
                                         ------------       ------------       ------------       ------------
                                            1,075,746          1,339,659          3,462,728          3,890,796
                                         ------------       ------------       ------------       ------------

Loss from operations                         (632,624)          (961,634)        (2,247,525)        (2,241,355)

Other income (expense):
   Interest income                                 --              9,928                139             32,457
   Interest expense                          (290,088)          (155,394)          (653,404)          (467,326)
                                         ------------       ------------       ------------       ------------

Loss before income taxes                 $   (922,712)      $ (1,107,100)      $ (2,900,790)      $ (2,676,224)

Benefit for income taxes                           --             51,856                 --             51,856
                                         ------------       ------------       ------------       ------------

Net loss                                 $   (922,712)      $ (1,055,244)      $ (2,900,790)      $ (2,624,368)

Preferred dividends                           (41,166)           (40,765)          (125,327)           (65,843)
                                         ------------       ------------       ------------       ------------

Net loss allocable to common
   stockholders                          $   (963,878)      $ (1,096,009)      $ (3,026,117)      $ (2,690,211)
                                         ============       ============       ============       ============

Weighted average common shares
   outstanding - basic and diluted         10,732,417         10,514,145         10,630,667         10,506,672
                                         ============       ============       ============       ============

Net loss per share - basic and
   diluted                               $      (0.09)      $      (0.10)      $      (0.28)      $      (0.26)
                                         ============       ============       ============       ============
</TABLE>







               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                  Page 4 of 15
<PAGE>   5



                        INTEGRATED SECURITY SYSTEMS, INC.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                             For the Nine Months Ended
                                                                     March 31,
                                                          -------------------------------
                                                              2001               2000
                                                          ------------       ------------

<S>                                                       <C>                <C>
Cash flows from operating activities:
   Net loss                                               $ (2,900,790)      $ (2,624,368)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation                                              122,407            163,023
     Amortization                                              113,713            170,570
     Provision for bad debt                                     18,000             17,400
     Provision for warranty reserve                             61,500             41,500
     Provision for inventory reserve                            15,000              4,000
     Unbilled receivables                                      221,995             26,511
     Expenses paid with common stock                           106,351            107,318
     Changes in operating assets and liabilities:
       Accounts receivable                                     105,013             27,402
       Inventories                                             (20,714)           (43,631)
       Other assets                                            (11,484)           481,900
       Accounts payable                                        443,810           (221,198)
       Accrued liabilities                                      15,172           (191,780)
                                                          ------------       ------------
           Net cash used in operating activities            (1,710,027)        (2,041,353)
                                                          ------------       ------------

Cash flows from investing activities:
   Purchase of property and equipment                          (41,270)           (87,325)

Cash flows from financing activities:
   Issuance of stock                                             2,183          1,688,021
   Dividends on preferred stock                               (125,327)           (65,844)
   Payments on debt                                           (117,877)          (427,146)
   Proceeds from notes payable and long-term debt            1,971,860            827,390
                                                          ------------       ------------
           Net cash provided by financing activities         1,730,839          2,022,421
                                                          ------------       ------------

Decrease in cash and cash equivalents                          (20,458)          (106,257)
Cash and cash equivalents at beginning of period                99,636            251,113
                                                          ------------       ------------
Cash and cash equivalents at end of period                $     79,178       $    144,856
                                                          ============       ============
</TABLE>






               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                  Page 5 of 15
<PAGE>   6



                        INTEGRATED SECURITY SYSTEMS, INC.
             Notes to Consolidated Financial Statements (Unaudited)
                    Nine Months Ended March 31, 2001 and 2000

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (all of
which are normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the interim period are
not necessarily indicative of the results that may be expected for the fiscal
year ending June 30, 2001.

The accompanying financial statements include the accounts of Integrated
Security Systems, Inc. and all of its subsidiaries, with all significant
intercompany accounts and transactions eliminated. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's fiscal 2000 Annual Report on Form 10-KSB filed on October 13,
2000, and all amendments to the Form 10-KSB filed after October 13, 2000 with
the Securities and Exchange Commission.

NOTE 2 - RECLASSIFICATION

Certain reclassification of prior year amounts have been made to conform to the
current period presentation.

NOTE 3 -FINANCING

The Company is in default of the covenants for the convertible debentures issued
to Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth
& Income Trust PLC. The Renaissance convertible debentures are secured by
equity, assets and future contracts, have an interest rate of 9% of outstanding
principal balance and are due in monthly installments though December 2003.
Monthly principal installments are $10 per $1,000 of the then remaining
principal amount of the debenture and were to commence beginning in December
1999 through maturity. These principal payments have not yet begun. At March 31,
2001, the principal amount of these convertible debentures in default was $4.6
million, of which $619,154 is outstanding as of March 31, 2001. The Company has
not received notice of default and is currently in negotiations to restructure
this debt. The Company currently has no other source of repayment and there can
be no assurance that these renegotiations will be successful. Accordingly, the
debentures are classified as short-term debt on the financial statements.

In November 2000, the Company entered into an agreement for a financial
restructuring plan with its two largest stockholders, Renaissance Capital Growth
& Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC. Both of
these Renaissance entities are managed by Renaissance Capital Group, Inc. The
financial restructuring plan provides that the Renaissance entities will
exchange all their outstanding convertible debentures, notes, and accrued
interest into a new class of the Company's preferred stock.

The new class of the Company's preferred stock, Series G preferred stock, would
have approximately $6 million principal amount, a 5% dividend that accrues but
is not paid until redemption, and would be convertible into shares of the
Company's common stock at $.20 per share. The Series G preferred stock would be
redeemable in years three through five, or earlier from the proceeds of the sale
of certain assets.




                                  Page 6 of 15
<PAGE>   7

As part of the financial restructuring plan, Renaissance Capital Growth & Income
Fund III, Inc. and Renaissance US Growth and Income Trust PLC have agreed to
advance a combined $1 million in promissory notes to the Company in a private
placement. In the event the Company receives at least $100,000 in additional
subscriptions under this placement, the $1 million in promissory notes will be
exchanged into the Company's Series F preferred stock. The Series F preferred
stock will have a 5% dividend, which accrues for two years, and is convertible
into common shares at $.20 per share. The promissory notes will mature 120 days
after the date of the promissory notes unless exchanged for the shares of the
Series F preferred stock.

The financial restructuring plan is subject to stockholder approval at the
annual meeting of the stockholders scheduled to be held on May 10, 2001. The
Company currently does not have a sufficient number of shares of Common Stock
authorized to accommodate these transactions. The Company is seeking stockholder
approval to amend its certificate of incorporation to increase the number of
authorized shares of Common Stock.


NOTE 4 - BUSINESS SEGMENTS

Information for the Company's reportable segments for the three and nine months
ended March 31, 2001 and 2000 is as follows:


<TABLE>
<CAPTION>
                                     For the Three Months Ended            For the Nine Months Ended
                                               March 31,                            March 31,
                                   -------------------------------       -------------------------------
                                       2001               2000               2001               2000
                                   ------------       ------------       ------------       ------------

<S>                                <C>                <C>                <C>                   <C>
Sales
   B&B Electromatic, Inc.          $  1,114,929       $  1,200,921       $  3,473,569          4,102,666
   Intelli-Site, Inc.                    93,714            308,680            296,926            875,117
                                   ------------       ------------       ------------       ------------
                                   $  1,208,643       $  1,509,601       $  3,770,495       $  4,977,783
                                   ============       ============       ============       ============

Income (loss) from operations
   B&B Electromatic, Inc.          $     28,150       $     13,950       $    135,048       $    303,450
   Intelli-Site, Inc.                  (342,932)          (584,318)        (1,479,201)        (1,483,942)
   Corporate                           (317,842)          (391,266)          (903,372)        (1,060,863)
                                   ------------       ------------       ------------       ------------
                                   $   (632,624)      $   (961,634)      $ (2,247,525)      $ (2,241,355)
                                   ============       ============       ============       ============
</TABLE>









                                  Page 7 of 15
<PAGE>   8



Item 2. Management's Discussion and Analysis or Plan of Operation.

FORWARD LOOKING STATEMENTS

This quarterly report on Form 10-QSB includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements can be identified by the use of forward-looking terminology such as
"may," "believe," "expect," "intend," "plan," "seek," "anticipate," "estimate,"
or "continue" or the negative of those words or other variations or comparable
terminology.

All statements other than statements of historical fact included in this
quarterly report on Form 10-QSB, including the statements under "Part I.--Item
2. Management's Discussion and Analysis or Plan of Operation" and located
elsewhere in this quarterly report on Form 10-QSB regarding the financial
position and liquidity of the Company are forward-looking statements. Although
the Company believes that the expectations reflected in the forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors regarding forward-looking
statements, including certain risks and uncertainties that could cause actual
results to differ materially from the Company's expectations, are disclosed in
this quarterly report on Form 10-QSB. The Company does not undertake any
obligation to publicly revise its forward-looking statements to reflect events
or circumstances that arise after the date of this quarterly report on Form
10-QSB.

Important factors that could cause actual results to differ materially from
those in the forward-looking statements in this quarterly report on Form 10-QSB
include changes from anticipated levels of operations, customer acceptance of
existing and new products, anticipated development schedules of new products,
anticipated levels of sales, future national or regional economic and
competitive conditions, changes in relationships with customers, access to
capital, casualty to or other disruption of the Company's production facility
and equipment, delays and disruptions in the shipment of the Company's products,
government regulations and the ability of the Company to meet its stated
business goals. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Company's cautionary statements.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

Sales. The Company's total sales decreased by $0.3 million, or 20%, to $1.2
million during the quarter ended March 31, 2001 from $1.5 million during the
quarter ended March 31, 2000. Sales at the Company's Intelli-Site, Inc.
subsidiary decreased from $0.3 million during the quarter ended March 31, 2000
to $0.1 million during the quarter ended March 31, 2001, primarily due to a
large end-user system installation project in the quarter ended March 31, 2000.
In addition, sales at the Company's B&B Electromatic, Inc. subsidiary decreased
from $1.2 million in the quarter ended March 31, 2000 to $1.1 million in the
quarter ended March 31, 2001, primarily due to a decline in the volume of
perimeter security sales. For the quarter ended March 31, 2001, approximately
92% of the Company's revenues were generated from the sale of products
manufactured by the Company, compared to 80% for the quarter ended March 31,
2000.

Gross Margin. Gross margin as a percent of sales increased to 37% during the
quarter ended March 31, 2001 from 25% during the quarter ended March 31, 2000.
This gross margin increase is due to the increase in software only sales at the
Company's Intelli-Site subsidiary. Software sales generally have higher gross
margins than either end-use system installations or the B& B product line.




                                  Page 8 of 15
<PAGE>   9

Selling, General and Administrative. Selling, general and administrative
expenses decreased by approximately 23% or $0.3 million during the quarter ended
March 31, 2001 compared to the quarter ended March 31, 2000, due to the
reallocation of programming personnel amounting to approximately $22,000 to the
research and product development department. In addition, various cost-cutting
measures were continuing to be implemented company wide during the quarter
ending March 31, 2001.

Research and Product Development. Research and product development expenses
increased by approximately 21% or $18,000 during the quarter ended March 31,
2001 compared to the quarter ended March 31, 2000. This increase is primarily
due to the reallocation of programming personnel to the research and product
development department at the Company's Intelli-Site subsidiary.

Interest Expense. Interest expense increased by approximately $135,000 during
the quarter ended March 31, 2001 compared to the quarter ended March 31, 2000,
due to additional debt required to meet working capital needs.

NINE MONTHS ENDED MARCH 31, 2001 COMPARED TO NINE MONTHS ENDED MARCH 31, 2000

Sales. The Company's total sales decreased by $1.2 million, or 24%, to $3.8
million during the nine months ended March 31, 2001 from $5.0 million during the
nine months ended March 31, 2000. Sales at the Company's Intelli-Site, Inc.
subsidiary decreased from $0.9 million during the nine months ended March 31,
2000 to $0.3 million during the nine months ended March 31, 2001, primarily due
to the installation of a large end-user system project during the nine months
ended March 31, 2000. In addition, sales at the Company's B&B Electromatic, Inc.
subsidiary decreased from $4.1 million during the nine months ended March 31,
2000 to $3.5 million during the nine months ended March 31, 2001, primarily due
to a decline in the volume of road and bridge sales. For the nine months ended
March 31, 2001, approximately 92% of the Company's revenues were generated from
the sale of products manufactured by the Company, compared to 82% for the nine
months ended March 31, 2000.

Gross Margin. Gross margin as a percent of sales remained comparable at
approximately 33% for the nine months ended March 31, 2001 and March 31, 2000.

Selling, General and Administrative. Selling, general and administrative
expenses decreased by approximately 15% or $0.5 million during the nine months
ended March 31, 2001 compared to the nine months ended March 31, 2000. This
decrease is due to the reallocation of programming personnel of approximately
$0.1 million to the research and product development. In addition,
implementation of various cost cutting measures were initiated during the nine
month period ending March 31, 2001.

Research and Product Development. Research and product development expenses
increased by approximately 41% or $115,000 during the nine months ended March
31, 2001 compared to the nine months ended March 31, 2000. This increase is
primarily due to the reallocation of programming personnel to the research and
product development department at the Company's Intelli-Site subsidiary.

Interest Expense. Interest expense increased by approximately $186,000 during
the nine months ended March 31, 2001 compared to the nine months ended March 31,
2000, due to additional debt required to meet working capital needs.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash position decreased by $20,458 during the nine months ended
March 31, 2001. At March 31, 2001, the Company had $79,178 in cash and cash
equivalents and had $490,000 outstanding under its accounts receivable factoring
facility. The factoring facility, which is secured by accounts





                                  Page 9 of 15
<PAGE>   10

receivable and inventory, permits the Company to borrow up to $0.8 million,
subject to availability under its borrowing base.

For the nine months ended March 31, 2001, the Company's operating activities
used $1,710,027 of cash compared to $2,041,353 of cash used in operations during
the nine months ended March 31, 2000. The decrease in cash used in operations is
primarily due to an increase in accounts payable.

The Company used $41,270 for the purchase of property and equipment during the
nine months ended March 31, 2001, compared to $87,325 for the nine months ended
March 31, 2000.

During the nine months ended March 31, 2001, the Company financed its operations
with cash flows from long-term borrowings of $1,971,860 compared to $827,390
during the nine months ended March 31, 2000.

The Company made payments of $117,877 on debt and other liabilities during the
nine months ended March 31, 2001, compared to payments of $427,146 on debt and
other liabilities during the nine months ended March 31, 2000.

The Company is in default of the covenants for the convertible debentures issued
to Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth
& Income Trust PLC. The Renaissance convertible debentures are secured by
equity, assets and future contracts, have an interest rate of 9% of outstanding
principal balance and are due in monthly installments though December 2003.
Monthly principal installments are $10 per $1,000 of the then remaining
principal amount of the debenture and were to commence beginning in December
1999 through maturity. These principal payments have not yet begun. At March 31,
2001, the principal amount of these convertible debentures in default was $4.6
million, of which $619,154 is outstanding as of March 31, 2001. The Company has
not received notice of default and is currently in negotiations to restructure
this debt. The Company currently has no other source of repayment and there can
be no assurance that these renegotiations will be successful. Accordingly, the
debentures are classified as short-term debt on the financial statements.

In November 2000, the Company entered into an agreement for a financial
restructuring plan with its two largest stockholders, Renaissance Capital Growth
& Income Fund III, Inc. and Renaissance US Growth and Income Trust PLC. Both of
these Renaissance entities are managed by Renaissance Capital Group, Inc. The
financial restructuring plan provides that the Renaissance entities will
exchange all their outstanding convertible debentures, notes, and accrued
interest into a new class of the Company's preferred stock.

The new class of the Company's preferred stock, Series G preferred stock, would
have approximately $6 million principal amount, a 5% dividend that accrues but
is not paid until redemption, and would be convertible into shares of the
Company's common stock at $.20 per share. The Series G preferred stock would be
redeemable in years three through five, or earlier from the proceeds of the sale
of certain assets.

As part of the financial restructuring plan, Renaissance Capital Growth & Income
Fund III, Inc. and Renaissance US Growth and Income Trust PLC have agreed to
advance a combined $1 million in promissory notes to the Company in a private
placement. In the event the Company receives at least $100,000 in additional
subscriptions under this placement, the $1 million in promissory notes will be
exchanged into the Company's Series F preferred stock. The Series F preferred
stock will have a 5% dividend, which accrues for two years, and is convertible
into common shares at $.20 per share. The promissory notes will mature 120 days
after the date of the promissory notes unless exchanged for the shares of the
Series F preferred stock.

The financial restructuring plan is subject to stockholder approval at the
annual meeting of the stockholders scheduled to be held on May 10, 2001. The
Company currently does not have a sufficient number of




                                 Page 10 of 15
<PAGE>   11

shares of Common Stock authorized to accommodate these transactions. The Company
is seeking stockholder approval to amend its certificate of incorporation to
increase the number of authorized shares of Common Stock.

The Company's backlog is calculated as the aggregate sales prices of firm orders
received from customers less revenue recognized. At April 30, 2001, the
Company's backlog was approximately $1.4 million. The Company expects that it
will fill the majority of this backlog by March 31, 2002.



                                 Page 11 of 15
<PAGE>   12



                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 2.  Changes in Securities.

On March 15, 2001, the Company filed with the Secretary of State of the State of
Delaware the following amendments to three of the Company's certificates of
designations for preferred stock: (a) a Certificate of Decrease for the
Company's Series A $20 Convertible Preferred Stock to retire 65,500 shares of
that series of preferred stock, (b) a Certificate of Elimination for the
Company's Series B $20 Convertible Preferred Stock to eliminate from the
Company's certificate of incorporation all matters set forth in the certificate
of designation regarding the Series B $20 Convertible Preferred Stock, and (c) a
Certificate of Elimination for the Company's Series C $20 Convertible Preferred
Stock to eliminate from the Company's certificate of incorporation all matters
set forth in the certificate of designation regarding the Series C $20
Convertible Preferred Stock. These three amendments to the certificates of
designation are attached as exhibits to this quarterly report on Form 10-QSB and
are incorporated herein by reference thereto.

Item 3.  Defaults Upon Senior Securities.

The Company is in default of the covenants for the convertible debentures issued
to Renaissance Capital Growth & Income Fund III, Inc. and Renaissance US Growth
& Income Trust PLC. The Renaissance convertible debentures are secured by
equity, assets and future contracts, have an interest rate of 9% of outstanding
principal balance and are due in monthly installments though December 2003.
Monthly principal installments are $10 per $1,000 of the then remaining
principal amount of the debenture and were to commence beginning in December
1999 through maturity. These principal payments have not yet begun. At March 31,
2001, the principal amount of these convertible debentures in default was $4.6
million, of which $619,154 is outstanding as of March 31, 2001. The Company has
not received notice of default and is currently in negotiations to restructure
this debt. The Company currently has no other source of repayment and there can
be no assurance that these renegotiations will be successful. Accordingly, the
debentures are classified as short-term debt on the financial statements.

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

None.

Item 5.  Other Information.

None.

Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits

     EXHIBIT NO.  DESCRIPTION

         4.1      Certificate of Decrease of Series A $20 Convertible Preferred
                  Stock

         4.2      Certificate of Elimination of Series B $20 Convertible
                  Preferred Stock

         4.3      Certificate of Elimination of Series C $20 Convertible
                  Preferred Stock



                                 Page 12 of 15
<PAGE>   13


(b) Reports filed on Form 8-K.

         Form 8-K filed March 9, 2001, filing certain notes and warrants
thereto.




                                 Page 13 of 15
<PAGE>   14



                                   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 Security Systems, Inc.
                              -------------------------------------------
                                             (Registrant)



Date:      May 9, 2001        /s/ C. A. RUNDELL, JR.
                              -------------------------------------------
                              C. A. Rundell, Jr.
                              Director, Chairman of the Board, and
                              Chief Executive Officer (Principal
                              Executive and Financial Officer)


Date:      May 9, 2001        /s/ RICHARD B. POWELL
                              -------------------------------------------
                              Richard B. Powell
                              Vice President, Chief Accounting
                              Officer (Principal Accounting Officer)





                                 Page 14 of 15
<PAGE>   15


                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
     EXHIBIT
     NUMBER       DESCRIPTION
     -------      -----------

<S>               <C>
         4.1      Certificate of Decrease of Series A $20 Convertible Preferred
                  Stock

         4.2      Certificate of Elimination of Series B $20 Convertible
                  Preferred Stock

         4.3      Certificate of Elimination of Series C $20 Convertible
                  Preferred Stock
</TABLE>



                                 Page 15 of 15