UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 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 May 31, 2004

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

         For the transition period from _______________ to _______________


                       Commission File Number 000-30794


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


             New York                               11-3042779
    ------------------------            ---------------------------------
    (State of incorporation)            (IRS Employer Identification No.)

           10501 FM 720 East
             Frisco, Texas                                 75035
 ----------------------------------------               ----------
 (Address of principal executive offices)               (Zip Code)


                  Issuer's telephone number:  (972) 381-1212


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

      At August 1, 2004 there were 18,017,071 shares of the issuer's common
 shares outstanding.

 Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No [X]

<PAGE>
                                GENERAL INDEX

                                                                    Page
                                                                   Number
----------------------------------------------------------------------------

                              PART I.
                       FINANCIAL INFORMATION


 ITEM 1.   FINANCIAL STATEMENTS..................................     3

 ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR
           PLAN OF OPERATION.....................................     9

 ITEM 3.   CONTROLS AND PROCEDURES...............................    12


                              PART II.
                         OTHER INFORMATION


 ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND
           USE OF PROCEEDS.......................................    12

 ITEM 5.   OTHER INFORMATION.....................................    13

 ITEM 6.   EXHIBITS..............................................    14

 SIGNATURES......................................................    15

 EXHIBIT INDEX...................................................    15

<PAGE>

                       PART I  -  FINANCIAL INFORMATION


 ITEM 1.   FINANCIAL STATEMENTS

            Integrated Performance Systems, Inc. and Subsidiaries
                    Consolidated Balance Sheet (Unaudited)

 ============================================================================

                                                       May 31,
                                                        2004
                                                    ------------
 ASSETS
 Current assets
   Cash                                            $      31,952
   Restricted Cash                                        40,000
   Trade accounts receivable, net of allowance for
    doubtful accounts of $13,059                         561,829
   Other receivables                                      21,273
   Inventory                                             433,823
   Prepaid expenses                                       24,420
                                                    ------------
     Total current assets                              1,113,297
                                                    ------------

 Property and equipment, net                             965,688
                                                    ------------
 Other assets
   Other                                                  46,387
                                                    ------------
     Total assets                                  $   2,125,372
                                                    ============

 LIABILITIES AND STOCKHOLDERS' DEFICIT
 Current liabilities
   Bank Overdraft                                  $     105,326
   Short-term borrowings (including related party
    amounts of $321,000)                               1,667,528
   Payable to shareholder                                878,299
   Accounts payable                                      823,522
   Accrued expenses                                    1,472,523
                                                    ------------
     Total current liabilities                         4,947,198
                                                    ------------

 Long-term debt, net of current maturities                50,000

 Commitments and contingencies (Note 7)                        -

 Stockholders' deficit
 Preferred stock; par value $0.01; $1,000 per
   share redemption value for Series A, B and
   C; $2.000 per share redemption value for
   Series D; 1,000,000 shares authorized:
     Series A - 12% cumulative dividends;
     10,000 shares authorized, 3,864 issued and
     outstanding; $3,864,000 liquidation value                39
   Series B - convertible 6%; 10,000 shares
     authorized, 923 issued and outstanding;
     $923,000 liquidation value                               10
   Series C - 12% cumulative dividends; 20,000
     shares authorized, 9,171 issued and
     outstanding; $9,171,000 liquidation value                91
   Series D - 4% cumulative dividends; 10,000
     convertible shares authorized, 745 issued
     and outstanding; $745,000 liquidation value               7
 Common stock; par value $0.01; 100,000,000 shares
   authorized, 17,922,892 shares issued and
   outstanding                                           179,229
 Additional paid-in capital                           14,939,476
 Accumulated deficit                                 (17,990,678)
                                                    ------------
     Total stockholders' deficit                      (2,871,826)
                                                    ------------
     Total liabilities and stockholders' deficit   $   2,125,372
                                                    ============


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

<PAGE>

            Integrated Performance Systems, Inc. and Subsidiaries
              Consolidated Statements of Operations (Unaudited)

 ============================================================================

                               Three        Three         Six          Six
                           Months Ended Months Ended Months Ended Months Ended
                           May 31, 2004 May 31, 2003 May 31, 2004 May 31, 2003
                           ------------ ------------ ------------ ------------
  Net sales                 $ 1,445,068  $ 1,026,968  $ 2,656,281  $ 2,864,496

  Cost of sales               1,666,803    1,180,375    3,068,340    2,825,479
                             ----------   ----------   ----------   ----------
  Gross (loss) income          (221,735)    (153,407)    (412,059)      39,017
                             ----------   ----------   ----------   ----------
  Selling, general and
    administrative              353,810      397,391      800,716      810,204
                             ----------   ----------   ----------   ----------
  Loss from operations         (575,545)    (550,798)  (1,212,775)    (771,187)
                             ----------   ----------   ----------   ----------
  Other income (expense):
  Interest expense             (149,200)     (52,661)    (239,298)    (168,764)
  Equity in loss of VoIUM             -      (55,879)           -      (55,879)
  Impairment of investment
    in VoIUM                          -            -     (465,000)           -
  Gain on disposition
    of subsidiaries             935,442            -      935,442            -
  Miscellaneous
    income (expense)             (1,600)           -       (1,600)       1,000
                             ----------   ----------   ----------   ----------
                                784,642     (108,540)     229,544     (223,643)
                             ----------   ----------   ----------   ----------
  Net income (loss)         $   209,097  $  (659,338) $  (983,231) $  (994,830)
                             ==========   ==========   ==========   ==========

  Preferred stock dividends $  (394,000) $         -  $  (878,080) $         -

  Loss available to
    common shareholders     $  (184,903) $(1,085,788) $(1,861,311) $(1,908,930)
                             ==========   ==========   ==========   ==========
  Loss per share - basic    $     (0.01) $     (0.11) $     (0.11) $     (0.19)
                             ==========   ==========   ==========   ==========
  Loss per share - diluted  $     (0.01) $     (0.11) $     (0.11) $     (0.19)
                             ==========   ==========   ==========   ==========
  Weighted average common
    shares oustanding -
    Basic and diluted        17,197,000    9,871,000   16,696,000   10,047,000


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

<PAGE>

             Integrated Performance Systems, Inc. and Subsidiaries
               Consolidated Statements of Cash Flows (Unaudited)

 ============================================================================

                                                       Six            Six
                                                  Months Ended   Months Ended
                                                  May 31, 2004   May 31, 2003
                                                  ------------   ------------
 Cash flows from operating activities:
 Net loss                                        $    (983,231) $    (994,830)
   Adjustments to reconcile net loss to net
   cash (used in) provided by operating
   activities:
     Depreciation and amortization                     182,626        190,159
     Issuance of common stock for services              29,700         74,250
     Amortization of debt discount                      50,246              -
     Impairment of investment in VoIUM                 465,000              -
     Gain on disposition of subsidiaries              (935,442)             -
     Changes in operating assets and liabilities:
       Trade accounts receivable                       214,921      1,018,834
       Other receivables                               (11,062)        16,888
       Inventory                                       (52,965)        76,623
       Prepaid expenses                                  3,802         11,362
       Other assets                                        698        (55,281)
       Accounts payable                                 73,199        178,809
       Other                                           224,436         28,914
                                                  ------------   ------------
 Net cash (used in) provided by
   operating activities                               (738,072)       545,728
                                                  ------------   ------------
 Cash flows from investing activities:
   Investment in VoIUM                                 (40,000)             -
   Acquisition of property and equipment               (77,461)       (27,098)
                                                  ------------   ------------
 Net cash used in investing activities                (117,461)       (27,098)
                                                  ------------   ------------
 Cash flows from financing activities:
   Bank overdraft                                      105,326              -
   Proceeds from sale of stock                         476,200        572,368
   Capital contribution                                232,588       (184,303)
   Payments on short term borrowings,
     line of credit and notes payable                 (191,412)      (851,617)
   Proceeds from long-term debt                        226,977              -
   Payments on long-term debt                                -        (47,380)
   Line of credit - related party                            -        (16,895)
                                                  ------------   ------------
 Net cash provided by (used in)
   financing activities                                849,679       (527,827)
                                                  ------------   ------------
 Net change in cash                                     (5,854)        (9,197)

 Cash, beginning of period                              37,806          9,257
                                                  ------------   ------------
 Cash, end of period                             $      31,952  $          60
                                                  ============   ============
 Supplemental cashflow information:
 Interest paid                                   $     161,138  $     165,221
                                                  ============   ============


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


<PAGE>

                     Integrated Performance Systems, Inc.
              Notes to Interim Consolidated Financial Statements
                                 May 31, 2004
                                 (Unaudited)

 NOTE 1 - BASIS OF PRESENTATION

 UNAUDITED FINANCIAL INFORMATION

 The unaudited condensed consolidated financial statements have been prepared
 by Integrated Performance Systems, Inc. and its subsidiaries (the "Company"
 or "IPS"), pursuant to the rules and regulations of the Securities and
 Exchange Commission and reflect all adjustments consisting of normal
 recurring entries, which, in the opinion of the Company, are necessary to
 present fairly the results for the interim periods.  The interim financial
 statements do not include all disclosures provided in fiscal year end
 financial statements prepared in accordance with accounting principles
 generally accepted in the United States, although the Company believes that
 the accompanying disclosures are adequate to make the information presented
 not misleading. Results of operations for the six-month period ended May 31,
 2004, are not necessarily indicative of the results that may be expected for
 the year ending November 30, 2004.

 These financial statements should be read in conjunction with the financial
 statements and notes thereto contained in the Company's Annual Report on
 Form 10-KSB for the year ended November 30, 2003.


 NOTE 2 - GOING CONCERN

 IPS has continued to experience significant losses and cash flow
 difficulties and there is doubt about its ability to continue as a going
 concern.  Management continues to look for ways to improve operational
 performance and is actively seeking additional sources of capital.


 NOTE 3 - COMMON STOCK AND PREFERRED STOCK

 During the three months ended May 31, 2004, IPS issued 30,000 shares of its
 common stock, valued at 29,700, to a broker in payment for services.

 During the three months ended May 31, 2004, IPS issued 678,000 shares of its
 common stock, valued at approximately $542,000, in connection with the sale
 of subsidiaries.

 During the three months ended May 31, 2004, IPS sold 657,200 shares of
 common stock pursuant to Regulation S for gross proceeds of approximately
 $816,000 of which IPS received approximately $281,000 and brokers in the
 United States and overseas received approximately $535,000 as commissions
 on the sales.  During the three months ended February 29, 2004, IPS sold
 462,773 shares of common stock pursuant to Regulation S for gross proceeds
 of approximately $667,000 of which IPS received $240,000 and brokers in the
 United States and overseas received approximately $427,000 as commissions
 on the sales.

 During the three months ended May 31, 2004, approximately $394,000 in
 dividends accrued on IPS' Nonconvertible Preferred Stock ($116,000 for
 Series A, $14,000 for Series B, and $264,000 for Series C). During the three
 months ended February 29, 2004, approximately $480,000 in dividends accrued
 on IPS' Nonconvertible Preferred Stock.  Additional shares of Nonconvertible
 Preferred Stock will be issued to entities over which our Chief Executive
 Officer exercises voting control, at a face value of $1,000 per share, in
 satisfaction of these dividends.


 NOTE 4 - CONCENTRATIONS OF RISK

 The following table represents the concentration of risk associated with
 major customers that individually account for 10% or more of revenues for
 the three and six month periods ended May 31, 2004 and the corresponding
 revenues from that customer:

                                    Three             Six
                                    Months           Months
                                 -----------      -----------
                 Customer A     $    328,835     $    696,357
                 Customer B          215,923          253,823
                 Customer C          188,649          459,455
                 Customer D          143,150          306,361
                                 -----------      -----------
                                $    876,557     $  1,715,996
                                 ===========      ===========

 NOTE 5 - INVESTMENT IN VOIUM TECHNOLOGIES, LTD

 IPS acquired a 48% ownership interest in VoIUM Technologies LTD ("VoIUM")
 on March 31, 2003 and accounted for the investment under the equity method.
 Management subsequently determined that the expected future cash flows were
 less than the carrying value of VoIUM and recognized an  impairment of the
 asset value at November 30, 2003.  During the three months ended February
 29, 2004, the Company advanced $40,000 cash to VoIUM as well as common
 stock having a fair value of $465,000.  On February 29, 2004, an additional
 impairment charge equal to the value of the common stock ($465,000) was
 recorded based upon an analysis of VoIUM's expected future cash flows.

 On April 21, 2004, IPS sold its 48% ownership interest in VoIUM, as well as
 its 84% ownership interest in China Voice Corp ("China Voice"), to a company
 affiliated with the president of IPS.  The consideration received for the
 sale was the redemption of Twenty-five Hundred (2,500) shares of IPS Series
 C Preferred Stock, having a face value of Two and One-half Million Dollars
 ($2,500,000), which shares of preferred stock were cancelled.

 Loss per share

 As part of the acquisition of VoIUM on March 31, 2003, IPS issued to VoIUM
 1,000,000 shares of its Common Stock that were to be sold offshore under
 SEC Regulation S to raise working capital for VoIUM. Because VoIUM never
 sold the 1,000,000 shares, they were never shown by IPS to be issued and
 outstanding.  However, with the sale and transfer of VoIUM on April 21,
 2004, IPS has included the 1,000,000 shares in the total number of shares
 of our Common Stock reported to be issued and outstanding.  Loss per share
 for the three and six month periods ended May 31, 2004 has been calculated
 to consider the 1,000,000 shares as issued and outstanding for the entire
 period.


 NOTE 6 - RELATED PARTY TRANSACTIONS

 On December 1, 2003, IPS issued a $3,248,000 promissory note for the
 purchase of 100% of the stock of Power Development, Inc. ("PDI"), a real
 estate management company, whose sole assets were as follows:

   *  50% interest in the proceeds from the sale of a tract land in Fort
      Worth which is owned by the president of IPS (Tract A).

   *  100% interest in the proceeds from the sale of two tracts of land
      located in Fort Worth, Texas which are owned by the president of
      IPS (Tracts B & C).

 While PDI was a subsidiary of IPS, tract A was sold on December 16, 2003
 and PDI received net proceeds totaling approximately $232,000.  The cash
 proceeds were used to pay expenses of IPS or were transferred to IPS.  In
 April 2004, IPS sold PDI to a related party.  Because title
 to the land did not transfer to IPS and PDI was subsequently sold, the
 $232,000 cash received was recorded as contributed capital in the
 accompanying financial statements.

 On April 21, 2004, IPS sold its entire 84% ownership interest in China Voice
 and its entire 48% ownership interest in VoIUM to Associates Funding Group,
 Inc., an affiliated company controlled by IPS' president.  The consideration
 received for the sale was the redemption of Two Thousand Five Hundred
 (2,500) shares of IPS' Series C Preferred Stock, having a face value of Two
 and One-half Million Dollars ($2,500,000), which stock was cancelled.  (See
 Note 5.)


 NOTE 7 - DISPOSITION OF ASSETS AND CONTINGENCIES

 On April 23, 2004, IPS sold to an unaffiliated company its entire ownership
 interest in subsidiaries Cadsouth Inc., PC Dynamics Corporation, PC Dynamics
 of Texas, Inc., and Integrated Performance Business Services Corp.,
 including its wholly owned subsidiary, Power Development, Inc.  At the time
 of the sale these subsidiaries owned no assets and maintained liabilities
 with an aggregate carrying value of approximately $1,477,000.  In exchange
 for the sale, IPS issued to the buyer 678,000 shares of common stock of IPS,
 valued at approximately $542,000 as of the sale date.  As a result, IPS
 recorded a gain on the disposition of subsidiaries in the amount of $935,000
 based upon the difference between the carrying amount of the liabilities
 sold and the fair value of the common stock issued in the sale.

 The debts transferred with the sale of the subsidiaries continue to be
 contingent liabilities of IPS, although management believes that collection
 against IPS is improbable.  Future enforcement of these debts against the
 Company could have a material adverse impact on the cash flow and liquidity
 of the Company.


 NOTE 8 - INVENTORY

 Inventory consists primarily of finished goods and raw materials and
 is priced at lower of cost or market, cost being determined using the
 first-in, first out (FIFO) method.  At May 31, 2004, inventory consisted
 of approximately $153,000 in raw materials and approximately $281,000 in
 work in progress.


 ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

                          Forward Looking Statements

      This report may contain "Forward Looking Statements," which are our
 expectations, plans, and projections, which may or may not materialize and
 which are subject to various risks and uncertainties, including statements
 concerning expected income and expenses, and the adequacy of our sources
 of cash to finance current and future operations.  When used in this
 report, the words "plans," "believes," "expects," "projects," "targets,"
 "anticipates," "estimates" and similar expressions are intended to identify
 forward-looking statements.  Factors which could cause actual results to
 materially differ from our expectations include the following:  general
 economic conditions and growth in the high tech industry; competitive
 factors and pricing pressures; changes in product mix; the timely
 development and acceptance of new products; and the risks described
 from time to time in our other filings with the Securities and Exchange
 Commission.  These forward-looking statements speak only as of the date of
 this report.  We expressly disclaim any obligation or undertaking to release
 publicly any updates or change in our expectations or any change in events,
 conditions or circumstances on which any such statement may be based, except
 as may be otherwise required by the securities laws.

                                   Overview

      We are a contract manufacturer of quality, high performance circuit
 boards and our principal office is located in Frisco, Texas, just north of
 Dallas.  Our products are used in computers, communication equipment, the
 aerospace industry, defense electronics and other applications requiring
 high performance electrical capability.

      The following discussion provides information to assist in the
 understanding of our financial condition and results of operations for
 the three and six months periods ended May 31, 2004.  It should be read in
 conjunction with the Consolidated Financial Statements and Notes thereto
 appearing in our Annual Report on Form 10-KSB for fiscal year ended November
 30, 2003.

                            Results of Operations

      Revenues.  Total revenues for the three months ended May 31, 2004 were
 approximately $1,445,000.  Total revenues for the same period in 2003 were
 $1,027,000.  The 41% increase is attributable to sales of approximately
 $300,000 to a new customer and a slight increase in sales to existing
 customers.

      Total revenues for the six months ended May 31, 2004 were approximately
 $2,656,000.  Total revenues for the same period in 2003 were $2,864,000. The
 7% decrease is attributable to sales of approximately $800,000 to one of our
 largest customers during the period in 2003, which were not duplicated in
 the current period.

      Gross Profit (Loss).  Gross loss for the three months ended May 31,
 2004 was approximately $222,000, versus a gross loss of $153,000 in the
 same period in 2003.  Gross loss for the six months ended May 31, 2004 was
 approximately $412,000, versus a gross profit of $39,000 for the same period
 in 2003.  The decrease in gross margin in both periods is attributable to
 the loss of orders for higher margin products during the period from one
 significant customer.  It is also related to a large order from one of our
 largest customers for product shipped during the first quarter of 2003.
 This order alone resulted in gross margin of approximately $370,000 during
 the first quarter of 2003, which was not duplicated in the current period.

      Operating Expenses.  Operating expenses for the three months ended May
 31, 2004, were approximately $354,000, compared to $397,000 for the same
 period in 2003.  Operating expenses for the six months ended May 31, 2004,
 were approximately $801,000, compared to $810,000 for the same period in
 2003.  The decrease in operating expenses in both periods is attributable
 to controlling certain costs such as selling expense, supplies, and
 professional fees.

      Other Income and Expenses.  Net other income was approximately $785,000
 for the three months ended May 31, 2004, compared to net other expense of
 $109,000 for the same period in 2003.  For the six months ended May 31,
 2004, net other income was approximately $230,000, compared to net other
 expense of $224,000 for the same period in 2003.  The difference in both
 periods is attributable to a one-time gain reported in connection with the
 disposition of several subsidiaries during the period ended May 31, 2004.
 During the six months ended May 31, 2004, an impairment charge related to
 our investment in VoIUM was recorded in the amount of $465,000.  No such
 charge was recorded during the first six months of fiscal 2003.  In April
 2004, we sold VoIUM to a company owned by our president.

                         Liquidity and Cash Resources

      Net Loss.  For the six months ended May 31, 2004, we reported a
 net loss of approximately $983,000, compared to a net loss of $995,000
 reported for the same period in 2003.  The slight decrease in net loss is
 attributable to a one-time gain reported in connection with the disposition
 of several subsidiaries during the period ended May 31, 2004, which was
 counterbalanced by the sale of higher margin products during the first
 quarter 2003 versus 2004.

      Cash Flows from Operations.  Net cash used in operations during the six
 months ended May 31, 2004 was approximately $778,000, compared to $546,000
 being provided by operations during the same period in 2003.  This
 significant change in our cash flows from operations relates to the
 collection of accounts receivable in 2003.  Due to our significant reduction
 in revenue in 2003, our accounts receivable balances decreased, which
 created a source of cash.  During the six months ended May 31, 2004, our
 accounts receivable balances continued to decrease, but by smaller amounts,
 yielding less cash collections.

      Cash Flows from Investing Activities.  Cash used for investing
 activities during the six months ended May 31, 2004 and 2003 was
 approximately $117,000 and $27,000, respectively, consisting generally of
 investments in property and equipment.  During the current period, we
 invested approximately $77,000 in computer software and related hardware.

      Cash Flows from Financing Activities.  Net cash provided by financing
 activities during the six months ended May 31, 2004 was approximately
 $850,000, consisting primarily of proceeds of $476,000 from the offshore
 sale of common stock and proceeds of $227,000 from long term debt.  Net cash
 used in financing activities during the six months ended May 31, 2003 was
 approximately $528,000, consisting primarily of proceeds of $572,000 from
 the sale of common and preferred stock and payments of $852,000 on short
 term borrowings, line of credit and notes payable.

      Contingent Liabilities.  The sale of certain subsidiaries of the
 Company (see Item 5 below) relieved the Company of approximately $1,477,000
 in debt, which was transferred with the subsidiaries sold.  These debts
 continue to be contingent liabilities of the Company, although we believe
 that collection against the Company is improbable.  However, future
 collection of these debts against the Company could have a material
 adverse effect on the cash flow and liquidity of the Company.

                                Going Concern

      Although we continue to incur significant losses from operations, we
 believe that we will be able to generate sufficient cash to support our
 operations for at least the next twelve months.  Our plan for reaching
 profitability generally includes continuing to generate revenue from ongoing
 operations, coupled with a reduction of general and administrative expenses.
  We continue to seek joint venture arrangements to help reduce our overhead.
  We also plan to implement additional employee and operational efficiencies
 to further reduce our fixed overhead.

      However, if we are unable to achieve a positive cash flow from the
 foregoing, additional financing or equity placements may be necessary to
 supplement our cash requirements.  Although we believe that sufficient
 financial resources are available, such resources may not continue to be
 available to us or may not be available upon favorable terms.

                         Critical Accounting Policies

      The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America (U.S. GAAP)
 requires us to make estimates and assumptions in determining the reported
 amounts of assets and liabilities and disclosure of contingent assets and
 liabilities at the date of the financial statements and the reported amounts
 of revenues and expenses during the reporting period. The significant
 estimates made by us in the accompanying financial statements relate to
 reserves for accounts receivable collectibility and inventory valuations.
 Actual results could differ from those estimates.

      Critical accounting policies are those that are both most important to
 the portrayal of a company's financial position and results of operations,
 and require management's subjective or complex judgments.  Below is a
 discussion of what we believe are our critical accounting policies.

      Revenue Recognition.  We recognize revenues when products are shipped.
  At that time an agreement is in place, price is fixed, title for product
 passes to the customer, and collectibility is reasonably assured.

      Allowance for Doubtful Accounts.  Provisions for the allowance for
 doubtful accounts are made monthly and adjustments are made periodically
 (as circumstances warrant) based upon the expected collectibility of all
 such accounts.

      Inventory.  Inventory consists primarily of finished goods and raw
 materials and is priced at lower of cost or market, cost being determined
 using the first-in, first out (FIFO) method.


 ITEM 3.   CONTROLS AND PROCEDURES

      Our Chief Executive Officer has reviewed and evaluated the
 effectiveness of the design and operation of our disclosure controls and
 procedures (as defined in Exchange Act Rules 240.13a-15(e) or 15d-15(e)) as
 of the end of the period covered by this report.  Based on that evaluation,
 the Chief Executive Officer has concluded that our current disclosure
 controls and procedures provide him with reasonable assurance that they are
 effective to provide him with timely material information relating to us
 required to be disclosed in the reports we file or submit under the Exchange
 Act.  In addition, there were no changes in our internal control or in other
 factors which could significantly affect internal controls subsequent to the
 date we carried out our evaluation.


                         PART II - OTHER INFORMATION

 ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      Issuances of equity securities during the fiscal quarter ended May 31,
 2004 that were not registered under the Securities Act of 1933 consisted of
 the following:

      During the period we issued to various offshore investors pursuant to
 Regulation S an aggregate of 657,200 shares of our Common Stock for gross
 proceeds of approximately $816,000 of which we received $281,000 and brokers
 in the United States and overseas received approximately $535,000 as
 commissions.

      During the period we issued 30,000 shares of our Common Stock to
 Capital Bankers as an annual consulting fee.

      In connection with the original acquisition of VoIUM, we issued to
 VoIUM 1,000,000 shares of our Common Stock to be sold outside the United
 States under SEC Regulation S to raise working capital for VoIUM.  None of
 the 1,000,000 shares originally issued to VoIUM were sold and these shares
 were not previously included in the total number of shares of our Common
 Stock reported as being issued and outstanding.  With the consummation of
 the sale of VoIUM in April 2004, these shares were deemed to be issued and
 outstanding and are now  included in the total number of shares of our
 Common Stock reported as issued and outstanding. (See Item 5:  Other
 Information, below, for more information relating to the sale of VoIUM.)

      During the period, approximately $394,000 in dividends accrued on our
 Nonconvertible Preferred Stock ($116,000 for Series A, $14,000 for Series B,
 and $264,000 for Series C).  Additional shares of Nonconvertible Preferred
 Stock will be issued to entities over which our Chief Executive Officer
 exercises voting control, at a face value of $1,000 per share, in
 satisfaction of these dividends.

      The foregoing issuances were, and will be, made pursuant to the
 exemption from registration provided by Rule 506 of Regulation D, Rule 903
 of Regulation S and/or Section 4(2) of the Securities Act of 1933, in that
 (a) the investor or its purchaser representative is reasonably believed to
 have such knowledge and experience in financial and business matters that
 it is capable of evaluating the merits and risks of the investment, (b)
 the investor or its purchaser representative were provided with required
 information and an opportunity to obtain additional information a reasonable
 period of time prior to the transaction, (c) the investor or its purchaser
 representative were advised of the limitations on resale of the Common
 Stock, (d) the investor represented its intention to acquire the securities
 for investment only and not with view to or for sale in connection with
 any distribution thereof, (e) the offer or sale was made in an offshore
 transaction, (f) no directed selling efforts were made in the United States
 by the issuer, a distributor, any of their respective affiliates, or any
 person acting on behalf of any of the foregoing, (g) offering restrictions
 were implemented, and/or (h) appropriate legends were affixed to the
 instruments issued in the transactions.


 ITEM 5.   OTHER INFORMATION

 Sale of VoIUM Technologies LTD and China Voice Corp

      We previously reported that we had agreed to contribute our 48%
 ownership interest in VoIUM Technologies LTD ("VoIUM") to a newly formed
 entity, China Voice Corp ("China Voice") and then planned to distribute
 shares of China Voice to our common and preferred shareholders in a spin-off
 transaction.  This transaction was not consummated and was cancelled.

      On April 21, 2004, pursuant to a Stock Purchase Agreement, we sold our
 entire 84% ownership interest in China Voice and our entire 48% ownership
 interest in VoIUM to Associates Funding Group, Inc., an affiliated company
 controlled by our president.  The consideration received for the sale was
 the redemption of Two Thousand Five Hundred (2,500) shares of the Company's
 Series C Preferred Stock, having a face value of Two and One-half Million
 Dollars ($2,500,000), which shares of preferred stock have been cancelled.
 The sale price was established considering the total amount or our
 investment into VoIUM and China Voice.

 Loss per share calculations

      In connection with the acquisition of VoIUM on March 31, 2003, we
 issued to VoIUM 1,000,000 shares of our Common Stock to be sold outside the
 United States under SEC Regulation S to raise working capital for VoIUM.
 Although additional shares of Common Stock were issued to VoIUM from time to
 time and were sold by VoIUM to meet its working capital needs, none of the
 1,000,000 shares originally issued to VoIUM were sold.  These shares were
 therefore excluded from the total number of shares of our Common Stock that
 were considered and reported to be issued and outstanding.

      However, with the sale and transfer of VoIUM on April 21, 2004, we have
 included the 1,000,000 shares in the total number of shares of our Common
 Stock reported to be issued and outstanding.  The loss per share ("EPS") for
 the six-month period ended May 31, 2004 has been calculated to consider the
 1,000,000 shares as issued and outstanding for the entire period.

       We are currently in discussion with our former auditors regarding the
 accounting for the 1,000,000 shares held by VoIUM.  These discussions are
 ongoing and could give rise to an amendment of our Annual Report on Form
 10-KSB for the period ended November 30, 2003 and our Quarterly Report on
 Form 10-QSB for the period ended February 29, 2004.  We are not certain
 what effect, if any, our conclusions might have on these prior periods.

 Sale of other Subsidiaries

      On April 23, 2004, pursuant to a Stock Purchase Agreement, we sold
 to an unaffiliated company our entire ownership interest in subsidiaries
 Cadsouth Inc., PC Dynamics Corporation, PC Dynamics of Texas, Inc., and
 Integrated Performance Business Services Corp., including its wholly
 owned subsidiary, Power Development, Inc.  At the time of the sale these
 subsidiaries owned no assets and maintained liabilities with an aggregate
 carrying value of approximately $1,477,000.  In exchange for the sale,
 we issued to the buyer 678,000 shares of our common stock, valued at
 approximately $542,000 as of the sale date.  As a result, we recorded a gain
 on the disposition of subsidiaries in the amount of $935,000 based upon the
 difference between the carrying amount of the liabilities sold and the fair
 value of the common stock issued in the sale.  The sale price was
 established through arms length negotiations between the parties,
 considering the book value of the subsidiaries and the market price
 of our Common Stock.

      The subsidiaries were sold to SSTV, Inc., 17708 Cedar Creek Dr.,
 Dallas, Texas  75248.  The buyer owns the property where our executive
 offices and manufacturing facilities are located and is also one of our
 creditors.


 ITEM 6.   EXHIBITS

      Reference is made to the Exhibit Index located on page 16 of this Form
 10-QSB for a list of all exhibits filed with and incorporated by reference
 in this report.

                                  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 PERFORMANCE SYSTEMS, INC.


                          By:  /s/  D. RONALD ALLEN
                          --------------------------
                                    D. Ronald Allen
                                    Chief Executive Officer
                                    and Principal Financial Officer

 August 24, 2004


                                EXHIBIT INDEX

 Exhibit
 Number               Description of Exhibit
 ------               ----------------------
 2.1 **    Stock Purchase Agreement dated as of April 21, 2004 between the
           Company and Associates Funding Group, Inc. concerning the sale of
           China Voice Corp and VoIUM Technologies Ltd.

 2.2 **    Stock Purchase Agreement dated as of April 23, 2004 between the
           Company and SSTV, Inc. concerning the sale of Cadsouth Inc., PC
           Dynamics Corporation, PC Dynamics of Texas, Inc., and Integrated
           Performance Business Services Corp., including its wholly owned
           subsidiary, Power Development, Inc.

 31 **     Certification of Chief Executive Officer and Principal Financial
           Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
           and Exchange Act of 1934, as adopted pursuant to Section 302 of
           the Sarbanes-Oxley Act of 2002.

 32 **     Certification of Chief Executive Officer and Principal Financial
           Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
           Section 906 of the Sarbanes-Oxley Act of 2002.

      **   Filed herewith.