UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended September 30, 2009
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number: 1-12471
INTEGRATED SURGICAL SYSTEMS, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 68-0232575
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
401 Wilshire Blvd., Suite 1020
Santa Monica, California 90401
------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
(310) 526-5000
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES |X| NO |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). YES |X| NO|_|
As of November 10, 2009 there were 7,658,154 shares of the registrant's common
stock outstanding.
Integrated Surgical Systems, Inc.
Form 10-Q
Table of Contents
Page
Part I. Financial Information
Item 1. Financial Statements 2
Balance Sheets at September 30, 2009 (unaudited) and December 31, 2008 (audited) 2
Statements of Operations (unaudited) for the nine months ended September 30, 2009 3
and 2008
Statements of Operations (unaudited) for the three months ended September 30, 2009 4
and 2008
Statements of Cash Flows (unaudited) for the nine months ended September 30, 2009 5
and 2008
Notes to Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 14
Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4T. Controls and Procedures 17
Part II. Other Information
Item 1. Legal Proceedings 18
Item 6. Exhibits 18
Signatures 20
Certifications
1
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Integrated Surgical Systems, Inc.
Balance Sheets
Assets September 30, December 31,
2009 2008
(Unaudited) (Audited)
----------------------------------
Current assets:
Cash $ 662,893 $ 3,322,358
Investment in available-for-sale securities 3,580,590 1,116,151
Other current assets 66,963 62,822
----------------------------------
Total current assets 4,310,446 4,501,331
----------------------------------
Total assets $ 4,310,446 $ 4,501,331
==================================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,513 % 4,951
Accrued liabilities -- 3,000
Accrued stock compensation 12,500 34,066
Income taxes payable -- 800
Deferred rent - current portion 23,160 22,379
----------------------------------
Total current liabilities 41,173 65,196
Rent deposit 8,175 8,175
Deferred rent - noncurrent 5,716 23,185
----------------------------------
Total liabilities 55,064 96,556
Convertible preferred stock, $0.01 par value, 1,000,000 shares
authorized; 168 shares issued and outstanding ($168,496 aggregate
liquidation
value) 168,496 168,496
Stockholders' equity:
Common stock, $0.01 par value, 100,000,000 shares authorized;
7,658,154 shares issued and outstanding 76,581 74,749
Additional paid-in capital 64,177,507 64,101,448
Accumulated deficit (60,169,762) (59,943,265)
Accumulated other comprehensive income 2,560 3,347
----------------------------------
Total stockholders' equity 4,086,886 4,236,279
----------------------------------
Total liabilities and stockholders' equity $ 4,310,446 $ 4,501,331
==================================
See accompanying notes to financial statements.
2
Integrated Surgical Systems, Inc.
Statements of Operations
(Unaudited)
Nine Months ended September 30,
2009 2008
----------- -----------
General and administrative expenses $ 269,170 $ 173,655
----------- -----------
Loss from operations (269,170) (173,655)
Other income
Interest income, net 38,724 56,918
Realized gain on available-for-sale securities 4,749 --
----------- -----------
Loss before income taxes (225,697) (116,737)
Income taxes 800 --
----------- -----------
Net Loss $ (226,497) $ (116,737)
=========== ===========
Basic net loss per common share $ (0.03) $ (0.02)
=========== ===========
Diluted net loss per common share $ (0.03) $ (0.02)
=========== ===========
Weighted average number of shares outstanding:
Basic 7,513,623 6,248,683
=========== ===========
Diluted 7,513,623 6,248,683
=========== ===========
Other Comprehensive Income $ (787) $ --
=========== ===========
See accompanying notes to financial statements.
3
Integrated Surgical Systems, Inc.
Statements of Operations
(Unaudited)
Three Months ended September 30,
2009 2008
----------- -----------
General and administrative expenses $ 52,977 $ 133,912
----------- -----------
Loss from operations (52,977) (133,912)
Other income
Interest income, net 14,444 21,723
Realized gain on available-for-sale securities 2,496 --
----------- -----------
Loss before income taxes (36,037) (112,189)
Income taxes -- --
----------- -----------
Net loss $ (36,037) $ (112,189)
=========== ===========
Basic net loss per common share $ (0.00) $ (0.02)
=========== ===========
Diluted net loss per common share $ (0.00) $ (0.02)
=========== ===========
Weighted average number of shares outstanding:
Basic 7,589,819 7,474,894
=========== ===========
Diluted 7,589,819 7,474,894
=========== ===========
Other Comprehensive Income $ 1,454 $ --
=========== ===========
See accompanying notes to financial statements.
4
Integrated Surgical Systems, Inc.
Statements of Cash Flows
(Unaudited)
Nine Months ended September 30,
2009 2008
----------- ------------
Cash flows from operating activities
Net loss $ (226,497) $ (116,737)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation 18,825 11,475
Realized gain on available-for-sale securities (4,749) --
Changes in assets and liabilities
Other current assets (4,139) (16,300)
Accounts payable 562 3,849
Accrued liabilities (3,000) (10,346)
Accrued stock compensation 37,500 21,566
Income taxes payable (800) (31,482)
Rent deposit received -- 8,175
Deferred rent payable (16,688) (211,790)
----------- -----------
Cash used in operating activities (198,986) (341,590)
----------- -----------
Cash flows from investing activities
Purchase of available-for-sale securities (4,750,284) --
Sale of available-for-sale securities 2,289,805 --
----------- -----------
Cash used in investing activities (2,640,479) --
----------- -----------
Cash flows from financing activities
Proceeds from sale of common stock -- 1,750,000
Offering cost -- (58,258)
----------- -----------
Cash provided by financing activities -- 1,691,742
Net increase (decrease) in cash (2,659,465) 1,350,152
Cash at beginning of period 3,322,358 3,099,199
----------- -----------
Cash at end of period $ 662,893 $ 4,449,351
=========== ===========
Supplemental disclosures of cash flow information:
Income taxes paid $ 1,600 $ --
Supplemental disclosures for non-cash transactions
Unrealized loss on available-for-sale securities $ (787) $ --
Distribution of common stock for stock compensation $ 59,066 $ --
See accompanying notes to financial statements.
5
Integrated Surgical Systems, Inc.
Notes to Financial Statements (unaudited)
1. Organization and Operations
Integrated Surgical Systems, Inc. (the "Company") was incorporated in Delaware
in 1990 to design, manufacture, sell and service image-directed,
computer-controlled robotic software and hardware products for use in orthopedic
surgical procedures. The Company's products were authorized to be sold through
international distributors to hospitals and clinics in European Union member
countries and Australia, Canada, India, Israel, Japan, Korea, New Zealand,
Switzerland and South Africa.
On June 28, 2007, upon the sale of substantially all of its assets, the Company
became inactive.
On June 28, 2007, the stockholders approved the future liquidation of the
Company if the Company was unable to complete an acquisition or similar
transaction within one year of the sale of its assets. At the same time, the
Company's stockholders granted the Board of Directors authority to abandon any
decision to liquidate without further stockholder action if it determines the
liquidation is not in the best interests of the Company or the Company's
stockholders. The Board of Directors decided it is in the best interest of the
Company and its stockholders to not liquidate.
2. Significant Accounting Policies
Basis of presentation
The accompanying unaudited financial statements and related notes have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial statements and with the rules and
regulations under Regulation S-X of the Securities and Exchange Commission for
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements presentation. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary to present fairly the financial position as of September 30, 2009 and
results of operations and cash flows for the nine months and three months then
ended have been included. These financial statements should be read in
conjunction with the financial statements of the Company together with the
Company's management discussion and analysis in the Company's Form 10-K for the
year ended December 31, 2008. Interim results are not necessarily indicative of
the results for a full year.
The financial statements include all the accounts of the Company.
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
Effective January 1, 2009, the Company adopted a new accounting standard
regarding business combinations. As codified under FASB ASC 805 (formerly SFAS
No. 141 revised 2007, "Business Combinations"), this update establishes
principles and requirements for determining how an enterprise recognizes and
measures the fair value of certain assets and liabilities acquired in a business
combination, including non-controlling interests, contingent consideration, and
certain acquired contingencies. This update also requires acquisition-related
transaction expenses and restructuring costs be expensed as incurred rather than
capitalized as a component of the business combination. This accounting standard
6
update applies prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008. The adoption of this accounting standard did not
have any impact on the results of operations and financial conditions of the
Company.
Effective January 1, 2009, the Company adopted an accounting standard which
establishes accounting and reporting standards for the non-controlling interest
in a subsidiary (previously referred to as minority interests). FASB ASC 810-10
also requires that a retained non-controlling interest upon the deconsolidation
of a subsidiary be initially measured at its fair value, (formerly SFAS No. 160,
"Accounting and Reporting on Non-controlling Interest in Consolidated Financial
Statements, an Amendment of ARB 51"). This accounting standard requires the
Company to report any non-controlling interests as a separate component of
stockholders' equity. The Company is also required to present any net income
allocable to non-controlling interests and net income attributable to
stockholders of the Company separately in its consolidated statements of income.
This accounting standard update applies prospectively to interim and annual
reporting periods beginning on or after December 15, 2008. The adoption of this
accounting standard did not have any impact on the results of operations and
financial conditions of the Company.
Effective January 1, 2009, adopted an accounting standard which amends and
expands the disclosure requirements related to derivative instruments and
hedging activities, as codified in FASB ASC 161-10 (formerly SFAS No. 161
"Disclosures about Derivative and Hedging Activities"). This accounting standard
requires qualitative disclosures about credit-risk-related contingent features
in derivative agreements. The adoption of these accounting updates did not have
any impact on the results of operations and financial conditions of the Company.
Effective April 1, 2009, the Company adopted new accounting standards for
subsequent events, as codified in FASB ASC 855-10 (formerly SFAS No. 165,
"Subsequent Events" ). This update establishes standards of accounting and
disclosure of events after the balance sheet date but before financial
statements are issued and requires disclosure of the date through which
subsequent events have been evaluated and the basis for the date. For the period
ended September 30, 2009, the subsequent events assessment was performed through
November 10, 2009. This was the date on which the Company's board of directors
approved the accompanying financial statements.
Recently Issued Accounting Pronouncements
Effective July 1, 2009, the Company adopted the "FASB Accounting Standards
Codification" and the Hierarchy of Generally Accepted Accounting Principles,
FASB ASC 105, (formerly SFAS No. 168, "Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles") This standard does not
change generally accepted accounting principles ("GAAP"). Rather, it defines the
accounting standards codification which became the source of authoritative U.S.
GAAP to be applied by nongovernmental entities. The Company began using the new
guidelines and numbering system prescribed by the Codification when referring to
GAAP for the period ended September 30, 2009. As the Codification was not
intended to change of alter existing GAAP, it did not have any impact on the
Company's financial statements.
In August 2009, the FASB issued Accounting Standards Update ("ASU") No. 2009-05,
"Fair Value Measurements and Disclosures", an update to FASB ASC 820-10 "Fair
Value Measurements and Disclosures-Overall". This update provides clarification
that in circumstances in which a quoted price in an active market for the
7
identical liability is not available, a reporting entity is required to measure
fair value using certain valuation techniques. This accounting update did not
have any impact on the results of operations and financial conditions of the
Company.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
3. Income (Loss) Per Share
Basic income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Diluted net income (loss) per share is computed by dividing net income (loss) by
the weighted average number of shares of common stock outstanding during the
period plus dilutive common stock equivalents, using the treasury stock method.
Convertible preferred stock of 683,554 shares, a warrant for 30,000 shares and
stock options of 159,500 were excluded from the calculation of loss per share
for the nine months and three months ended September 30, 2009, because their
effect was anti-dilutive. Convertible preferred stock of 639,454 shares, a
warrant for 30,000 shares and stock options of 162,500 were excluded from the
calculation of loss per share for the nine months and three months ended
September 30, 2008, because their effect was anti-dilutive.
4. Investment in Available-for-Sale Securities
The following is a summary of the Company's investment in available-for-sale
securities as of September 30, 2009:
Unrealized Unrealized
Cost Gains Losses Fair Value
------------------------------------------------------------------------
U.S. federal agency securities $ 1,264,313 $ 3,503 $ (1,377) $ 1,266,439
Corporate securities 632,691 4,263 (629) 636,325
Certificates of deposit 1,681,026 309 (3,509) 1,677,826
----------- ----------- ----------- -----------
Total $ 3,578,030 $ 8,075 $ (5,515) $ 3,580,590
=========== =========== =========== ===========
The cost and fair value of investment in available-for-sale debt securities, by
contractual maturity, as of September 30, 2009, are as follows:
Fair
Cost Value
--------------------------
Due within one year $ 998,279 $ 997,296
Due after one year through three years 1,426,578 1,429,533
Due after three years 1,153,173 1,153,761
---------- ----------
$3,578,030 $3,580,590
========== ==========
8
Expected maturities will differ from contractual maturities because the issuers
of certain debt securities have the right to call or prepay their obligations
without any penalties. The Company intends to be opportunistic with the purchase
and sale of its debt securities and expects all the securities to be sold or
called during the twelve-months ended September 30, 2010. Therefore, the Company
has classified the entire fair value of its investment in available-for-sale
debt securities as current assets in the accompanying balance sheets.
FASB ASC 820 "Fair Value Measurements and Disclosures" (formerly SFAS No. 157)
clarifies that fair value is an exit price, representing the amount that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. As such, fair value is a market-based
measurement that is determined based on assumptions that market participants
would use in pricing an asset or a liability. As a basis for considering such
assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes
the inputs used in the valuation methodologies in measuring fair value:
o Level 1 - Observable inputs that reflect quoted prices (unadjusted)
for identical assets or liabilities in active markets.
o Level 2 - Include other inputs that are directly or indirectly
observable in the marketplace.
o Level 3 - Unobservable inputs which are supported by little or no
market activity.
The fair value hierarchy also requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value.
In accordance with FASB ASC 820, we measure our cash and investments in
available-for-sale securities at fair value. Our cash and investments in
available-for-sale securities are classified within Level 1 by using quoted
market prices utilizing market observable inputs.
5. Common Stock
On April 25, 2008, the Company sold an aggregate of 2,896,394 shares of common
stock at $0.6042 per share, for an aggregate purchase price of $1,750,000. The
Company incurred $58,258 of expenses in connection with the offering. Certain of
the investors are affiliated with the Company's advisory services firm that is
currently providing investment banking services.
On July 29, 2009 and August 19, 2009 the Company issued 68,480 and 23,150,
respectively, shares of common stock as compensation to each of two of directors
(Note 7). Both directors are affiliated with the Company's advisory services
firm that is currently providing investment banking services.
6. Convertible Preferred Stock
The Company's Certificates of Incorporation authorized 1,000,000 shares of
undesignated, serial preferred stock. Preferred stock may be issued from time to
time in one or more series. The Board of Directors is authorized to determine
the rights, preferences, privileges, and restrictions granted to and imposed
upon any wholly unissued series of preferred stock and designation of any such
series without any further vote or action by the Company's stockholders.
As of September 30, 2009 and December 31, 2008, the Company's only outstanding
series of convertible preferred stock is the Series G Convertible Preferred
Stock ("Series G").
9
The Series G stock has a stated value of $1,000 per share, and is convertible
into common stock at conversion price equal to 85% of the lowest sale price of
the common stock on its listed market over the five trading days preceding the
date of conversion ("Beneficial Conversion Feature"), subject to a maximum
conversion price. The number of shares of common stock that may be converted is
determined by dividing the stated value of the number of shares of convertible
preferred stock to be converted by the conversion price. The Company may elect
to pay the Series G holder in cash at the current market price multiplied by the
number of shares issuable upon conversion.
The value that had been assigned to the Beneficial Conversion feature of the
Series G was based on the difference between the maximum conversion price and
quoted market price of the common stock on the date that the Series G was sold
(the "Discount"). The Discount was accreted using the straight-line method over
the conversion period. The Series G does not entitle holders to dividends or
voting rights, unless required by law.
For the nine months ended September 30, 2009 and the year ended December 31,
2008, no shares of Series G were converted into shares of common stock. At
September 30, 2009 and December 31, 2008, the outstanding Series G shares could
have been converted into a minimum of 683,554 and 707,966 shares of common
stock, respectively.
Upon a change in control, sale of or similar transaction, as defined, each
holder of the Series G has the option to deem such transaction as a liquidation
and may redeem their shares at the liquidation value of $1,000, per share, for
an aggregate amount of $168,496. As such redemption is not in control of the
Company, the Series G preferred stock has been accounted for as if they were
redeemable preferred stock and are classified on the balance sheet between
liabilities and stockholders' equity.
7. Stock-based compensation
The Company currently has a stock option plan to attract, motivate and retain
selected officers, employees, directors and consultants under which incentive or
non-incentive options may be granted, generally for a term of ten years from the
date of grant. Exercise prices of incentive stock options may not be less than
100% and exercise prices of non-statutory stock options may not be less than 85%
of the fair market value of the common stock on the date of the grant. For
persons owning 10% or greater of the voting power of all classes of the
Company's stock, the exercise price of the incentive or the non-qualified stock
options may not be less than 110% of the fair market value of the common stock
on the date of the grant. The plan is administered by the Company's board of
directors.
FASB ASC 718 "Compensation-Stock Compensation" (formerly SFAS 123(R)) requires
entities to estimate the number of forfeitures expected to occur and record
expense based upon the number of awards expected to vest. Prior to adoption of
FASB ASC 718, the Company accounted for forfeitures as they occurred, as
permitted under FASB ASC 718. The cumulative effect of adopting the method
change of estimating forfeitures is not material to the Company's financial
statements for the nine months and three months ended September 30, 2009.
The 1998 Stock Option Plan (1998 Plan) was established to grant up to 85,000
non-qualified options through May 12, 2008 to employees and other individuals
providing services to the Company. Options under the 1998 Plan vest variably
from one year to four years from the date grant and must be exercised within 30
days of employee termination. As of September 30, 2009 the plan had expired;
therefore, no options were available for future grant.
10
The 2000 Stock Award Plan (2000 Plan) was established to grant up to 100,000
incentive options through December 11, 2010 to employees, excluding officers and
directors, and other individuals providing services to the Company. Options
under the 2000 Plan vest variably from one year to four years from the date
grant and must be exercised within three months of employee termination. As of
September 30, 2009 and December 31, 2008, the 2000 plan had 98,046 options
available for future grant.
Under both plans, exercised, forfeited/expired or cancelled shares may be
reissued.
Options outstanding or options forfeited/expired may be from expired plans. For
the nine months ended September 30, 2009, option activity was as follows:
Remaining
Weighted-Average Contractual Aggregate Fair
Shares Exercise Price Term Value
----------------------------------------------------------- -------------------
Outstanding at beginning of period 161,000 $ 0.97
Granted - $ -
Expired and forfeited 1,500 $ 36.04
Exercised - $ -
-------------------------------------------------------------------------------
Outstanding at end of period 159,500 $ 0.64 3.44 $43,335
Exercisable at September 30, 2009 159,500 $ 0.64 3.44 $43,335
All of the Company's granted and outstanding options were vested at September
30, 2009.
The Company recorded stock-based compensation expense, related to its stock
options, which is included in general and administrative expenses, for the nine
months ended September 30, 2009 and 2008, of $18,825 and $11,475 respectively,
and for the three months ended September 30, 2009 and 2008, of $3,765 and $4,866
respectively.
The Company's stock options have no intrinsic value as of September 30, 2009.
As of September 30, 2009 a summary of options outstanding under the plans was as
follows:
Range of Weighted-Average Number Weighted-Average Number Weighted-Average
Exercise Price Remaining Contractual Outstanding at Exercise Price Exercisable at Exercise Price
Life (Years) 9/30/09 9/30/09
- -------------------------------------------------------------------------------------------------------------------
0.00-9.99 3.5 158,000 $0.36 158,000 $0.36
10.00-30.00 0.3 1,500 29.17 1,500 29.17
- -------------------------------------------------------------------------------------------------------------------
3.4 159,500 $0.64 159,500 $0.64
=== ======= ======= =====
The following is a summary of the status of the Company's non-vested options as
of September 30, 2009, and changes during the nine month period ended September
30, 2009:
Weighted-Average
Grant-Date
Non-vested Shares Shares Fair Value
- --------------------------------------------------------------------------------
Non-vested at beginning of period 100,000 $0.30
Granted - -
Expired and Forfeited - -
Vested 100,000 $0.30
- --------------------------------------------------------------------------------
Non-vested at end of period - $ -
11
During 2008, the Company agreed to compensate two of its directors with common
stock in lieu of cash cash compensation and accrued $34,066 as of December 31,
2008. The number of shares was to be determined based upon the equivalent cash
compensation accrued divided by the closing stock price on March 31, 2009. The
closing stock price on March 31, 2009 was $0.34 resulting in compensation of
68,480 shares to each of the two directors. These shares were issued on July 29,
2009. The two directors also chose to be compensated with common stock for the
periods April 1 to June 30, 2009 and July 1 to September 30, 2009. The number of
shares was to be determined based upon the cash compensation accrued divided by
the closing stock price on June 30, 2009 and September 30, 2009, respectively.
The closing stock price on June 30, 2009 was $0.27 resulting in compensation of
23,150 shares to each of the two directors. These shares were issued on August
19, 2009. The closing stock price on September 30, 3009 was $0.29 resulting in
compensation of 21,555 shares to each of the two directors. These shares have
not been issued as of the date of these financial statements. The Company
recorded stock-based compensation related to the common stock earned for the
nine months and three months ended September 30, 2009 of $37,500 and $12,500,
respectively.
8. Income Taxes
Effective January 1, 2007, the Company adopted the provisions of FASB ASC 740
"Income Taxes" (formerly Financial Accounting Standards Board (FASB)
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109"). FASB ASC 740 clarifies the
accounting for uncertainty in income taxes recognized in the Company's financial
statements 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. FASB ASC 740 also provides guidance under
recognition, classification, interest and penalties, accounting in interim
periods, disclosure and transition.
Federal and state income tax returns for the years ended December 31, 2008, 2007
and 2006 are subject to review by the taxing authorities.
The Company's policy is to classify assessments, if any, for tax related
interest as interest expenses and penalties as general and administrative
expenses.
The Company has evaluated and concluded that there are no uncertain tax
positions requiring recognition in the Company's financial statements for the
nine months ended September 30, 2009.
9. Related Party Transactions
In July, 2008, the Company retained an accounting firm in which an officer and
director is a partner to perform accounting and administrative services. During
the nine months and three months ended September 30, 2009, the Company paid this
firm $30,901 and $11,438, respectively.
12
The Company entered into an Investment Banking Advisory Services agreement in
November 2007. The Company extended this agreement indefinitely in April 2009.
The agreement as modified may be terminated by either party upon 30-days written
notice. The Company advanced $25,000 to the Investment Banking firm in December
2007 for its expenses. The remaining $9,878 was repaid to the Company in April
2009. The Company recorded for the nine months and three months ended September
30, 2009 general and administrative expense of $15,122 and $0, respectively, for
legal expenses presented against this advance. There have been no other payments
or fees earned as a result of this agreement. The Company also has a money
market account with this Investment Banking Firm and invested in short-term
federal securities, with a balance of $443,238 at September 30, 2009. This
Investment Banking firm manages the available-for-sale investments for the
Company, a total of $3,580,590 at September 30, 2009.The Chief Executive Officer
and director of the Company is the Chief Executive Officer and a director of the
Investment Banking firm. Another officer and director of the Company is a
managing director of the same Investment Banking firm.
10. Fair Value of Financial Instruments
FASB ASC 820 "Fair Value Measurements and Disclosures", (formerly No. 157, "Fair
Value Measurements"), which defines the fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. This
standard is effective for financial statements issued for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal years. Our
adoption of FASB ASC 820 on January 1, 2008 did not have a material impact on
the Company's financial position, results of operations or cash flows.
The carrying value of accounts receivable, cash accounts, other current assets,
accounts payable, deferred rent, and accrued liabilities are considered to be
representative of their respective fair values because of the short-term nature
of those instruments.
FASB ASC 825 "Financial Instruments" (formerly SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities"), permits entities to
choose to measure at fair value many financial instruments and certain other
items that had previously not been required to be measured at fair value.
Subsequent changes in fair value for designated items are required to be
reported in earnings in the current period. FASB ASC 825 also establishes
presentation and disclosure requirements for similar types of assets and
liabilities measured at fair value. As permitted by FASB ASC 825, we have
elected not to use the fair value option to measure our available-for-sale
securities and will continue to report under FASB ASC 320, "Investments-Debt and
Equity Securities". We have made this election because the nature of our
financial assets and liabilities are not of such complexity that they would
benefit from a change in valuation to fair value.
11. Commitments and Contingencies Lease
As of September 30, 2009, the Company was committed for future minimum rent
under the lease for its former manufacturing, warehouse and administrative
space, net of sublease income, plus subsidy payments by the Company to the
sublessor, through December 31, 2010. The present value of the future minimum
rent under the lease, net of sublease income, was charged to general and
administrative expenses in connection with the Company's continuing operations.
The minimum payments are as follows:
Sublease
net of sublease
subsidy
Lease payments Net
------------------------------------------------
October 1 through December 31, 2009 $ 23,850 $ 17,850 $ 6,000
2010 97,875 73,875 24,000
-----------------------------------------------
$121,725 $ 91,725 $ 30,000
================================================
13
Other
On January 8, 2009, a complaint was filed in Superior Court of California,
County of Sacramento in which the Company was named as a co-defendant in a
matter involving an automobile accident. The plaintiffs are seeking damages for
pain & suffering, emotional distress, past and future medical expenses and past
and future loss of earnings totaling approximately $30,000,000. The Company
believes the demands are without merit and intends to vigorously defend the
complaint. To the best of the Company's knowledge, there are no other
proceedings or litigation currently threatened or proceeding against us or
threatening us.
From time to time, the Company may be party to other claims and litigation
arising in the ordinary course of business. The Company does not believe that
any adverse final outcome of any of these matters, whether or not covered by
insurance, would have a material adverse effect on the Company.
The Company is subject to various legal proceedings and claims arising in the
ordinary course of business. There are no current proceedings or litigation
involving us that we believe if judgment were rendered against us would have a
material adverse impact on our financial position, results of operation or cash
flows.
12. Subsequent Event
For the period ended September 30, 2009, the subsequent events assessment was
performed through November 10, 2009. This was the date on which the Company's
board of directors approved the accompanying financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Statements
The discussion in this Quarterly Report on Form 10-Q contains forward-looking
statements that have been made pursuant to the provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based on current expectations, estimates and projections 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," "on target," "envisions," and variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict; therefore, actual results may differ materially from those expressed or
forecasted in any such forward-looking statements. Unless required by law, the
Company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
14
However, readers should carefully review the risk factors set forth in other
reports or documents the Company files from time to time with the SEC,
particularly the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and any Current Reports on Form 8-K.
The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto in Part I, Item 1 of this Quarterly
Report on Form 10-Q and with the audited Financial Statements and Notes thereto,
together with Management's Discussion and Analysis of Financial Condition and
Results of Operations, which are included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2008 as filed with the SEC.
Overview
We were incorporated in Delaware in 1990 to design, manufacture, sell and
service image-directed, computer-controlled robotic software and hardware
products for use in orthopedic surgical procedures. Although we had not received
clearance to market the ROBODOC(R) System (ROBODOC) in the U.S., we were
permitted to export the system provided certain requirements were met. Products
approved for use by European Union member countries and Australia, Canada,
India, Israel, Japan, Korea, New Zealand, Switzerland and South Africa, do not
require U.S. FDA export approval. We had sold our robotic systems to
international distributors, who in turn resold the product in their territories.
Our international distributors were KTEC in Japan, ROCOM Frontier in Korea and
Paramount Impex in India.
After the sale of substantially all of our assets on June 28, 2007, the Company
became inactive. The Company has no employees and all services are provided by
contracted personnel.
Our operations are limited to raising additional funds to be used to maintain
our public company status and for a business combination if a suitable candidate
is located. Our stockholders approved the future liquidation of the Company if
we were unable to complete an acquisition or similar transaction by June 28,
2008. Our stockholders also granted the Board of Directors authority to abandon
any decision to liquidate without further stockholder action if it determined
the liquidation was not in the best interests of the Company or our
stockholders. The Board of Directors has decided it is in the best interest of
the Company and its stockholders to not liquidate.
For the nine months and three months ended September 30, 2009, our general and
administrative expenses consisted primarily of our continuing expenses to
maintain our public company status, the cost to maintain a lease agreement for
the facility we used while we were an operating company offset by a sublease for
the same space. We retained the lease obligation as part of the sale of
substantially all of our assets. The sublease agreement provides for the
sublessee to pay our lessor each month for the rent owed by us under our lease
through December 31, 2010, the duration of the lease term. As an incentive to
agree to the sublease, we have agreed to pay the sublessor $2,000 each month our
rent is paid.
Results of Operations
Nine Months Ended September 30, 2009 and 2008
For the nine months ended September 30, 2009 and 2008 we had a net loss of
$226,497 and $116,737, respectively. General and administrative expenses were
$269,170 and $173,655 for the nine months ended September 30, 2009 and 2008,
respectively. General and administrative expenses were offset for the nine
months ended September 30, 2008 by the effect of an approximately $212,000
reduction in deferred rent from a sublease agreement with a company to lease
office space from us. Legal fees decreased by approximately $81,000 from the
nine months ended September 30, 2008 to September 30, 2009 due to an effort to
control our costs. Business insurance decreased approximately $22,000 from the
nine months ended September 30, 2008 to September 30, 2009 due to a change in an
insurance policy in an effort to control our costs. Stock-based compensation
increased by approximately $16,000 for the nine months ended September 30, 2008
to September 30, 2009 due to the addition of two board members in April 2008
with compensation beginning when they became members. State tax expense
decreased approximately $14,000 from the nine months ended September 30, 2008 to
15
September 30, 2009 due to a reduction in the base used for the calculation of
Delaware gross receipts tax. Accounting and accounting consulting fees decreased
by approximately $23,000 from the nine months ended September 30, 2008 to
September 30, 2009, due to a decrease in cost for independent accountant and
bookkeeping services. Net interest income was $38,724 and $56,918 for the nine
months ended September 30, 2009 and 2008, respectively. The decrease of
approximately $18,000 was due to less total funds in interest-bearing cash and
securities offset by a higher percentage of funds being invested in bonds
yielding a higher return than funds deposited in a savings account.
Three Months Ended September 30, 2009 and 2008
For the three months ended September 30, 2009 and 2008 we had a net loss of
$36,037 and $112,189, respectively. General and administrative expenses were
$52,977 and $133,912 for the three months ended September 30, 2009 and 2008,
respectively. Legal fees decreased by approximately $49,000 from the nine months
ended September 30, 2008 to September 30, 2009 due to an effort to control our
costs and an approximately $11,000 negotiated decrease in an invoice for legal
services which had been previously expensed during the three month period ended
June 30, 2009. Accounting and accounting consulting fees decreased by
approximately $8,000 from the nine months ended September 30, 2008 to September
30, 2009, due to a decrease in cost for independent accountant services.
Business insurance decreased approximately $7,000 from the nine months ended
September 30, 2008 to September 30, 2009 due to a change in an insurance policy
in an effort to control our costs. Net interest income was $14,444 and $21,723
for the three months ended September 30, 2009 and 2008, respectively. The
decrease of approximately $7,000 was due to less total funds in interest-bearing
cash and securities offset by a higher percentage of funds being invested in
bonds yielding a higher return than funds deposited in a savings account.
Liquidity and Capital Resources
We believe our current cash position is adequate to carry out our plan.
At September 30, 2009 and December 31, 2008, our "quick ratio" (cash divided by
current liabilities), a conservative liquidity measure designed to predict our
ability to pay bills, was 16.10 and 50.96, respectively. The decrease in the
"quick ratio" ratio at September 30, 2009 from December 31, 2008 was due to
increased investment of cash in available-for-sale investments. This investment
results in less cash at September 30, 2009 and more in available-for-sale
investments, which is recorded in the accompanying financial statements as a
current asset. Our "current ratio" (current assets divided by current
liabilities) was 104.69 and 69.04 at September 30, 2009 and December 31, 2008.
We anticipate that we will incur operating losses from continuing operations in
the next twelve months, until we enter into a business combination or until our
liquidation.
Cash used in operating activities was $198,986 and $341,590 for the nine months
ended September 30, 2009 and 2008, respectively. Cash used in operating
activities for the nine months ended September 30, 2009 was due primarily to our
net loss of $226,497 and a decrease in deferred rent of $16,688 offset by adding
back non-cash expense for stock-based compensation of $18,825 and accrued stock
compensation of $37,500. Cash used in operating activities for the nine months
ended September 30, 2008 was due primarily to our net loss of $116,737, an
increase in other current assets of $16,300 and decreases in deferred rent of
$211,790, in income taxes payable of $31,482 and accrued liabilities of $10,346
offset by adding back non-cash expense for stock-based compensation of $11,475
and accrued stock compensation of $21,566.
16
Cash used in investing activities for the nine months ended September 30, 2009
of $2,460,479 was from the purchase of available-for-sale securities of
$4,750,284 offset by the sale of available-for-sale securities of $2,289,805.
Cash provided by financing activities for the nine months ended September 30,
2008 was $1,691,742 and was due to the net proceeds as a result of the April
2008 sale of common stock.
We do not have any material commitments for capital expenditures.
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, liquidity or capital resources that
are material to our investors.
Critical Accounting Policies and Estimates
The Company's discussion and analysis of the financial condition and results of
operations are based upon the Company's unaudited financial statements included
elsewhere in this Form 10-Q and has been prepared in accordance with accounting
principles generally accepted in the United States of America as disclosed in
our annual financial statements in our Form 10-K for the year ended December 31,
2008. Interim results are not necessarily indicative of the results for a full
year.
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk represents the risk of loss that may impact our financial position,
operating results or cash flows due to changes in U.S. interest rates. Our
exposure to market risk is confined to our cash and available-for-sale
investments that we expect to hold less than one year. The goals of our cash
investment policy are the security of the principal invested and fulfillment of
liquidity needs. We currently do not hedge interest rate exposure. Because of
the short-term nature of our investments, we do not believe that an increase in
market rates would have any material negative impact on the value of our
investment portfolio.
As of September 30, 2009, we held $662,893 in money market, savings and checking
accounts. The Company has a checking account and savings accounts at one major
banking institution with combined balances of $189,655 at September 30, 2009.
The Company has a savings account in another major banking institution with a
balance of $30,000 at September 30, 2009. These checking and savings accounts
are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to
$250,000 per institution. The Company has a money market account in a brokerage
account with a third financial institution, invested in fixed-income securities,
with a balance of $443,238 at September 30, 2009. The funds in the money market
at this institution are guaranteed by the Securities Investor Protection
Corporation (SIPC) up to $500,000. The Company had no uninsured funds at
September 30, 2009.
17
Item 4T. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management has established and maintains a system of disclosure controls and
procedures designed to provide reasonable assurance that information required to
be disclosed by us in the reports filed or submitted by us under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms, and include controls and procedures designed to provide reasonable
assurance that information required to be disclosed by us in those reports is
accumulated and communicated to our management, including our Chief Executive
Officer and our Chief Financial Officer (our principal executive officer and
principal financial officer, respectively), as appropriate to allow timely
decisions regarding required disclosure. As of September 30, 2009, our
management, including our Chief Executive Officer and our Chief Financial
Officer, conducted an evaluation of our disclosure controls and procedures.
Based on this evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective to
provide reasonable assurance that the information required to be disclosed by us
in the reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.
All disclosure control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation.
(b) Changes in Internal Controls
There were no changes in internal control during the nine-month period ended
September 30, 2009. Management has not identified any matters that constitute
material weaknesses (as defined under the Public Company Accounting Oversight
Board Auditing Standard) in our internal controls over financial reporting.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
On January 8, 2009, a complaint was filed in Superior Court of California,
County of Sacramento in which the Company was named as a co-defendant in a
matter involving an automobile accident. The plaintiffs are seeking damages for
pain & suffering, emotional distress, past and future medical expenses and past
and future loss of earnings totaling approximately $30,000,000. The Company
believes the demands are without merit and intends to vigorously defend the
complaint. To the best of the Company's knowledge, there are no other
proceedings or litigation currently threatened or proceeding against us or
threatening us.
From time to time, the Company may be party to other claims and litigation
arising in the ordinary course of business. The Company does not believe that
any adverse final outcome of any of these matters, whether or not covered by
insurance, would have a material adverse effect on the Company.
The Company is subject to various legal proceedings and claims arising in the
ordinary course of business. There are no current proceedings or litigation
involving us that we believe if judgment were rendered against us would have a
material adverse impact on our financial position, results of operation or cash
flows.
Item 6. Exhibits
Pursuant to the rules and regulations of the SEC, we have filed certain
agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements
may contain representations and warranties by the parties. These representations
and warranties have been made solely for the benefit of the other party or
18
parties to such agreements and (i) may have been qualified by such disclosures
made to such other party or parties, (ii) were made only as of the date of such
agreements or such other date(s) as may be specified in such agreements and are
subject to more recent developments, which may not be fully reflected in our
public disclosure, (iii) may reflect the allocation risk among the parties to
such agreements and (iv) may apply materiality standards different from what may
be viewed as material to investors. Accordingly, these representations and
warranties may not describe our actual state of affairs at the date hereof and
should not be relied upon.
Exhibit No. Description
- ----------- -----------
3.1 Articles of Incorporation (1)
3.2 By-laws (1)
31.1 Certification Pursuant to Exchange Act Rule 13a-14(a) of
Christopher A. Marlett *
31.2 Certification Pursuant to Exchange Act Rule 13a-14(a) of
Michael J. Tomczak *
32.1 Certification Pursuant to Section 1350 of the Sarbanes-Oxley
Act of 2002 of Christopher A. Marlett *
32.2 Certification Pursuant to Section 1350 of the Sarbanes-Oxley
Act of 2002 of Michael J. Tomczak *
(1) Incorporated by reference to Form SB-2 filed on July 30, 1996
* Filed herewith
19
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
INTEGRATED SURGICAL SYSTEMS, INC.
By: /s/ Michael J. Tomczak
-------------------------------------------
Michael J. Tomczak, Chief Financial Officer
Dated: November 10, 2009
20
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher A. Marlett, Chief Executive Officer of Integrated Surgical
Systems, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009 of Integrated Surgical Systems, Inc. (the
"registrant");
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this Quarterly 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
Quarterly Report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in
which this Quarterly Report is being prepared;
(b) Designed such internal control over financial reporting or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this Quarterly Report, my
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this Quarterly
Report based on such evaluation; and
(d) Disclosed in this Quarterly Report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions); (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.
Dated: November 10, 2009 By: /s/ Christopher A. Marlett
-----------------------
Christopher A. Marlett
Chief Executive Officer
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Tomczak, Chief Financial Officer of Integrated Surgical
Systems, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009 of Integrated Surgical Systems, Inc. (the
"registrant");
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this Quarterly 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
Quarterly Report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in
which this Quarterly Report is being prepared;
(b) Designed such internal control over financial reporting or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this Quarterly Report my
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this Quarterly
Report based on such evaluation; and
(d) Disclosed in this Quarterly Report any change in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions); 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.
Dated: November 10, 2009 By: /s/ Michael J. Tomczak
-----------------------
Michael J. Tomczak
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Christopher A. Marlett, Chief Executive Officer of Integrated Surgical
Systems, Inc. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
1. The Quarterly Report on Form 10-Q of the Company for the quarter ended
September 30, 2009, which this certification accompanies (the
"Periodic 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 Periodic Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
Dated: November 10, 2009 /s/ Christopher A. Marlett
----------------------------
Christopher A. Marlett
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Tomczak, Chief Financial Officer of Integrated Surgical Systems,
Inc. (the "Company"), hereby certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Quarterly Report on Form 10-Q of the Company for the quarter ended
September 30, 2009, which this certification accompanies (the
"Periodic 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 Periodic Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
Dated: November 10, 2009 /s/ Michael J. Tomczak
---------------------------
Michael J. Tomczak
Chief Financial Officer