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 March 31, 2007
[ ] Transition Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to ________
Commission file number: 1-12471
INTEGRATED SURGICAL SYSTEMS, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 68-0232575
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1433 N. Market Blvd. #1, Sacramento, CA 95834
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(Address of principal executive offices)
(916) 285-9943
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the exchange Act). Yes [ ] No [ X ]
The number of shares of common stock, $0.01, par value, outstanding on May 14,
2007 was 45,784,089. Transitional Small Business Disclosure format (check one).
Yes [ ] No [ X ]
Integrated Surgical Systems, Inc.
Form 10-QSB
for the quarter ended March 31, 2007
Table of Contents
Page
Part I. Financial Information
Item 1. Financial Statements 2
Balance Sheet (unaudited) at March 31, 2007 2
Statements of Operations (unaudited) for the
three months ended March 31, 2007 and 2006 3
Statements of Cash Flows (unaudited) for the
three months ended March 31, 2007 and 2006 4
Notes to Financial Statements (unaudited) 5
Item 2. Management's Discussion and Analysis 6
Item 3. Controls and Procedures 10
Part II. Other Information
Item 1. Legal Proceedings 10
Item 6. Exhibits 10
Signature 11
Certifications
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Integrated Surgical Systems, Inc.
Balance Sheet
March 31, 2007
(Unaudited)
Assets
Current assets:
Cash $ 1,541,304
Accounts receivable 18,255
Inventory 437,541
Other current assets 287,901
------------
Total current assets 2,285,001
Net property and equipment 9,410
Other Assets 8,425
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$ 2,302,836
============
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable $ 135,401
Accrued payroll and related expenses 38,176
Accrued liabilities 247,794
Unearned revenue 229,000
Note payable 3,700,000
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Total current liabilities 4,350,371
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Convertible preferred stock, $0.01 par value,
1,000,000 shares authorized;
168 shares issued and outstanding (
$168,496 aggregate liquidation value) 168,496
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Total liabilities 4,518,867
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Stockholders' deficit:
Common stock, $0.01 par value, 100,000,000 shares
authorized; 45,784,089 shares issued and outstanding 457,841
Additional paid-in capital 61,993,858
Deferred compensation (42,241)
Accumulated deficit (64,625,489)
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Total stockholders' deficit (2,216,031)
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$ 2,302,836
============
See accompanying notes to unaudited financial statements.
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Integrated Surgical Systems, Inc.
Statements of Operations
(Unaudited)
Three months ended March 31,
--------------------------------------
2007 2006
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Net revenue $ 963,228 $ 2,256,050
Cost of revenue 203,088 402,054
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760,140 1,853,996
Operating expenses:
Selling, general and administrative 353,103 728,173
Research and development 276,721 158,339
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629,824 886,512
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Operating income 130,316 967,484
Other (expense) income, net (1,034) 5,024
Interest expense net (58,996) --
------------ ------------
Income before taxes 70,286 972,508
Income tax 800 --
------------ ------------
Net income $ 69,486 $ 972,508
============ ============
Basic net income per common share $ * $ 0.02
============ ============
Diluted net income per common share $ * $ 0.01
============ ============
Shares used in computing basic net income per share 45,784,089 45,084,089
============ ============
Shares used in computing diluted net income per share 52,644,675 79,611,958
============ ============
* Less than one percent
See accompanying notes to unaudited financial statements.
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Integrated Surgical Systems, Inc.
Statements Cash Flows
(Unaudited)
Three months ended March 31,
---------------------------------
2007 2006
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Cash flows from operating activities:
Net income $ 69,486 $ 972,508
Adjustments to reconcile net income to net cash (used in) provided by
Operating activities:
Stock compensation 16,943 --
Depreciation 613 --
Gain on property and equipment -- (5,000)
Changes in operating assets and liabilities:
Accounts receivable (1,589) (1,513,963)
Inventory (128,890) 239,322
Other current assets (77,005) (101,343)
Accounts payable 48,476 351,510
Accrued payroll and related expenses 15,668 (683,053)
Accrued liabilities 80,994 (7,500)
Unearned revenue (809,582) 855,570
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Net cash (used in) provided by operating activities (784,886) 108,051
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (1,078) --
Proceeds on sale of property and equipment -- 5,000
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Net cash (used in) provided by investing activities (1,078) 5,000
----------- -----------
Cash flows from financing activities:
Proceeds from note payable 1,000,000
Payment on note payable -- (100,000)
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Net cash provided by (used in) financing activities 1,000,000 (100,000)
----------- -----------
Net increase in cash 214,036 13,051
Cash at beginning of period 1,327,268 158,789
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Cash at end of period $ 1,541,304 $ 171,840
=========== ===========
See accompanying notes to unaudited financial statements.
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Integrated Surgical Systems, Inc.
Notes to Financial Statements (unaudited)
1. Organization and Operations
Integrated Surgical Systems, Inc. (Company) was incorporated in Delaware in 1990
to design, manufacture, sell and service image-directed, computer-controlled
robotic software and hardware products for use in orthopedic surgical
procedures. The Company's products are authorized to be sold through
international distributors to hospitals and clinics in European Union member
countries and Australia, Canada, India, Israel, Japan, Korea, New Zealand,
Switzerland and South Africa.
2. Significant Accounting Policies
Basis of presentation
The accompanying unaudited financial statements and related notes have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial statements and with the rules and
regulations under Regulation SB of the Securities and Exchange Commission for
Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements presentation. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary to present fairly of the financial position as of March 31, 2007 and
results of operations and cash flows for the 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-KSB for the year ended December
31, 2006. Interim results are not necessarily indicative of the results for a
full year.
Certain amounts for prior years have been reclassified to conform to 2007
financial statement presentations.
The financial statements include all the accounts of the Company.
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Actual results
could differ from those estimates. Significant estimates made by management
include revenue recognition, allowances for inventory and warranty liability.
New Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
3. Note Payable
On April 23, 2007, the Company amended the Asset Agreement (and Loan Agreement
to provide that the purchase price for the sale of substantially all of the
assets of the Company will be paid at the closing and the amount of
consideration will vary depending upon when stockholder approval of the
transaction is obtained. In the event that stockholder approval is obtained on
or before June 30, 2007, the consideration will be $4 million; after June 30,
2007 but on or before July 31, 2007 the consideration will be $3.5 million;
after July 31 but on or before August 31, 2007 the consideration will be $3.25
million; and after August 31, 2007 but on or before September 30, 2007 the
consideration will be $3 million. Further, the amended agreements extended the
date after which purchaser can terminate the Asset Agreement from June 30, 2007
to September 30, 2007.
-5-
The amended Loan Agreement also extends, from June 30, 2007 to September 30,
2007, the deadline for the Company to obtain stockholder approval for the asset
transaction in order to avoid being obligated to grant the exclusive license to
the purchaser in the Asian markets for the Company's ROBODOC and ORTHODOC
systems. It also reduces the time, from six months to three months that the
Company has to repay outstanding loans in the event that stockholder approval is
not obtained. Further, the amended Loan Agreement reduces the obligation of the
lender to provide additional funds to the Company from $2.3 million to $350,000,
per month, commencing July 1, 2007 and the first day of each successive month
thereafter until the earlier of: (i) September 1, 2007 or (ii) such time as
stockholder approval has been obtained.
4. Income Taxes
Effective January 1, 2007, the Company adopted the provisions of Financial
Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in the Company's financial statements in accordance with FASB Statement 109,
"Accounting for Income Taxes", and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition.
Management has evaluated and concluded that there are no significant uncertain
tax positions requiring recognition in the Company's financial statements as of
January 1, 2007. The evaluation was performed for the tax years ended December
31, 2003, 2004, 2005 and 2006, the tax years which remain subject to examination
for Federal and California purposes as of March 31, 2007.
The Company's policy is to classify assessments, if any, for tax related
interest as interest expenses and penalties as general and administrative
expenses.
5. Common Stock
During the first quarter of 2007, the Company issued options to purchase 250,000
shares of common stock to employees valued at $7,645. Options to purchase
200,000 shares of common stock are exercisable at $0.04, per share, through
January 11, 2012 and 50,000 shares of common stock are exercisable at $0.03, per
share, through February 19, 2012
6.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 March 31, 2007, the
Company had an accumulated deficit of $64,625,489 and negative working capital
of $2,023,129. The report of the independent registered public accounting firm
on the Company's December 31, 2006 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, the sale of assets, 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.
7. Subsequent events
In April and May 2007 the Company issued options to purchase 200,000, 100,000,
and 5,000 shares of common stock to employees, exercisable in five years at
$0.035, $0.031, and $0.031, per share.
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Item 2. Management's Discussion and Analysis
Forward-Looking Statements
The discussion in this Quarterly Report on Form 10-QSB contains forward-looking
statements that have been made pursuant to the provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based on current expectations, estimates and projections about the software
industry and certain assumptions made by the Company's management. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"could," "would," "may" and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict; therefore, actual results may
differ materially from those expressed or forecasted in any such forward-looking
statements. Unless required by law, the Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise. However, readers should carefully
review the risk factors set forth in other reports or documents the Company
files from time to time with the SEC, particularly the Company's Annual Report
on Form 10-KSB, Quarterly Reports on Form 10-QSB and any Current Reports on Form
8-K.
The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto in Part I, Item 1 of this Quarterly
Report on Form 10-QSB and with the audited Financial Statements and Notes
thereto, together with Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2006 as filed with
the SEC.
Overview
We were incorporated in Delaware in 1990 to design, manufacture, sell and
service image-directed, computer-controlled robotic software and hardware
products for use in orthopedic surgical procedures. Although we 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 are authorized to sell our robotic systems
to international distributors, who in turn can resell the product in their
territories. Our international distributors are KTEC in Japan, ROCOM Frontier in
Korea and Paramount Impex in India.
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 warranty reserves recorded.
Results of operations
We generated net income for the first quarter of 2007 of $69,000, or less than
one cent per basic share and less than one cent per dilutive share, compared to
net income for the first quarter of 2006 of $973,000 or $0.02 per basic share
and $0.01 per dilutive share.
Net revenue
Net revenue of $963,000 in Q1 2007 decreased 57% when compared to $2,256,000 in
the first quarter of 2006. The major components of revenue for Q1 2007 were
comprised of $100,000 from a system upgrade, $54,000 from repairs and
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consumables, $58,000 from service contracts and $752,000 from software and
implant development compared to $2,070,000 from systems sales, $138,000 from
repairs and consumables and $48,000 from service contracts in the first quarter
of 2006. The lack of system sales accounted for the largest decrease in revenue
and is primarily the result of our current focus to obtain FDA clearance for the
U.S. market.
Cost of revenue
Cost of revenue of $203,000 in Q1 2007 decreased 50% when compared to $402,000
in the first quarter of 2006, as a result of the decrease in systems productions
and sales during the first quarter of 2007. Cost of revenue was 21% of revenue
in Q1 2007 and 18% in Q1 2006, with the decrease in production the fixed cost
variable in the cost of revenues equation become more significant in the
comparative percentages.
Gross margin
Gross margin of $760,000 decreased 59% during the first quarter of 2007 when
compared to $1,854,000 in the first quarter of 2006 and were 79% of revenue in
Q1 2007 and 82% of revenue in Q1 2006. The decrease in production during the
first quarter of 2007 as compared to the first quarter of 2006 had a larger
component of fixed cost which limited our ability to reduce costs below a
certain point.
Operating expenses
Operating expenses of $630,000 decreased 29% during the first quarter of 2007
when compared to $887,000 in the first quarter of 2006 and were 65% of revenue
compared to 39% of revenue in the first quarter of 2006.
Selling, general and administrative expenses
Selling, general and administrative expense of $353,000 decreased 52% during the
first quarter of 2007 when compared to $728,000 in the first quarter of 2006 and
were 37% of revenue compared to 32% of revenue in the first quarter of 2006.
Selling, general and administrative expense in Q1 2006 included $600,000 to a
distributor as commission expense. Without this commission, selling, general and
administrative expense would only have been $128,000 or 6% of revenue for Q1
2006 which was due to our limited operations at that time. The G&A expenses on
an adjusted basis actually increased by $225,000 or 175% as we began to add
permanent staff and reactivate our efforts to obtain FDA clearance.
Research and development
Research and development of $277,000 increased 75% during the first quarter of
2007 when compared to $158,000 in the first quarter of 2006 and were 29% of
revenue compared to 7% of revenue in the first quarter of 2006. Although we had
very limited research and development activity in the first quarter of 2006, we
began to add staff and incur other development costs in our efforts to obtain
FDA clearance through the latter part of 2006 and the first quarter of 2007.
Interest expense, net
Interest expense net for the first quarter of 2007 of $59,000 resulted from
accrued interest of $68,000 on the prime +1% Novatrix note payable partially
offset by $9,000 of interest earned on cash in bank.
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
to assure continuing operations. The report of our Independent Registered Public
Accounting Firm on our December 31, 2006 financial statements includes 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, the sale of assets, increasing product
-8-
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 March 31, 2007 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 March 31, 2007, our "quick ratio" (cash and accounts receivable divided by
current liabilities), a conservative liquidity measure designed to predict our
ability to pay bills, was only .36. It has been difficult for us to meet
obligations, including payroll, as they come due, and we expect this situation
to continue through 2007.
Net cash used in operating activities was $785,000 for the three months ended
March 31, 2007. This resulted primarily from income of $69,000, a decrease in
unearned revenue of $810,000, an increase in inventory of $129,000 and an
increase in other current assets of $77,000, offset in part by an increase in
accounts payable of $48,000, an increase in accrued payroll and related expenses
of $16,000 and an increase in accrued liabilities of $81,000.
The decrease in unearned revenue was primarily due to the recognition of
unearned warranty revenues deferred from prior periods of $58,000 and the
recognition of completed long term development projects of $752,000. The
increase in inventory resulted from normal operational requirements for the
development process. As a result of our past credit history we have been
required by several suppliers to pre-pay or make a deposit on purchases and as a
result other assets have increased. The increase in accrued liabilities was
primarily the result of accrued interest on the Novatrix note.
Funds provided by financing activities for the three months ended March 31,
2007, were a result of scheduled advances on the Novatrix note.
We expect to derive most of the cash required to support our operations in 2007
through additional loans under the Novatrix note and sales of ROBODOC Systems,
as well as from the sale of assets. Assuming the assets are not sold and we
grant the license, we may not have enough cash to continue our Robodoc Systems
operations and management may have to consider other alternatives. It is
critical for us to maintain operations as a going concern in 2007. There can be
no assurance that we can continue to convert inventory, collect receivables or
raise additional funds on acceptable terms, if at all.
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.
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 Registered Public Accounting Firm.
Actual results may differ from these estimates under different assumptions or
conditions.
-9-
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 their ability to make
payments, additional allowances may be required.
The Company writes down the inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of
inventory and the estimated market value based upon assumptions about
future demand and market conditions. If actual market conditions are less
favorable than those the Company projected, additional inventory
write-downs 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 March 31, 2007 that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
We are subject to legal proceedings and claims that arise in the normal course
of business. We cannot assure that we would prevail in such matters nor can we
assure we would have sufficient funds available to satisfy any adverse judgment.
Due to the inherent uncertainties of litigation, were there any such matters, we
would not be able to accurately predict their ultimate outcome. At May 14, 2007,
there were no current proceedings or litigation involving us that we believe if
judgment were rendered against us would have a material adverse impact on our
financial position, results of operation or cash flows.
Item 6. Exhibits
(a)Exhibits
31.1 Certification Pursuant to Exchange Act Rule 13a-14(a) of Ramesh C. Trivedi
31.2 Certification Pursuant to Exchange Act Rule 13a-14(a) of David H. Adams
32.1 Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
of Ramesh C. Trivedi
32.2 Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002
of David H. Adams
-10-
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
May 14, 2007
-11-
Exhibit 31.1
CERTIFICATION
I, Ramesh C. Trivedi, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Integrated
Surgical Systems, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and I have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the
registrant's board of directors:
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
/s/ Ramesh C. Trivedi
- ------------------------------------------
Ramesh C. Trivedi, Chief Executive Officer
May 14, 2007
Exhibit 31.2
CERTIFICATION
I, David H. Adams, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Integrated
Surgical Systems, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and I have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the
registrant's board of directors:
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
/s/ David H. Adams
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David H. Adams, Chief Financial Officer
May 14, 2007
Exhibit 32.1
CERTIFICATION
In connection with the Quarterly Report on Form 10-QSB of Integrated Surgical
Systems, Inc. (the "Company") for the period ended March 31, 2007, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Ramesh C. Trivedi, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. 1350, that:
(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ Ramesh C. Trivedi
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Ramesh C. Trivedi, Chief Executive Officer
May 14, 2007
Exhibit 32.2
CERTIFICATION
In connection with the Quarterly Report on Form 10-QSB of Integrated Surgical
Systems, Inc. (the "Company") for the period ended March 31, 2007, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
David H. Adams, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. 1350, that:
(1) The Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ David H. Adams
- ---------------------------------------
David H. Adams, Chief Financial Officer
May 14, 2007