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 January 31, 2006


    [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
         THE EXCHANGE ACT

         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)          (I.R.S. Employer Identification No.)

     901 Hensley Lane   Wylie, Texas                      75098
 ----------------------------------------               ----------
 (Address of principal executive offices)               (Zip Code)

                  Issuer's telephone number: (214) 291-1427

      Indicate by check  mark whether the  registrant (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 [ ]

      Check whether the issuer is a  shell company (as defined in Rule  12b-2
 of the Exchange Act).  Yes [ ]  No [X]

      At January 31, 2006 there were 61,152,194 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.....................................    13

 ITEM 3.   CONTROLS AND PROCEDURES...............................    15


                         PART II - OTHER INFORMATION

 ITEM 1.   LEGAL PROCEEDINGS.....................................    15

 ITEM 5.   OTHER INFORMATION.....................................    16

 ITEM 6.   EXHIBITS..............................................    16

 SIGNATURES......................................................    18

<PAGE>

            INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheet
                                 (Unaudited)
                                                             January 31,
                                                                 2006
                                                             ------------
         ASSETS

 Current assets:
  Cash                                                      $   1,359,744
  Trade accounts receivable, net of allowance
    for doubtful accounts of $38,041                            5,202,789
  Prepaid expenses and other                                      155,462
  Inventory                                                     1,877,429
  Deferred income tax asset                                        96,121
  Income tax receivable                                           153,267
                                                             ------------
         Total current assets                                   8,844,812
                                                             ------------

 Property and equipment, net                                    1,722,481

 Other assets:
   Goodwill                                                     8,275,034
   Customer base, net                                           3,704,001
                                                             ------------
                                                               13,701,516
                                                             ------------
         Total assets                                       $  22,546,328
                                                             ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
   Accounts payable                                         $   2,984,441
   Accrued expenses (including $88,667 interest
     to related party)                                            828,267
   Notes payable, current portion                                 572,752
                                                             ------------
         Total current liabilities                              4,385,460
                                                             ------------

 Noncurrent liabilities:
   Long-term debt, net of current maturities                    1,698,667
   Note payable to related party                                4,200,000
   Deferred income tax liability                                1,639,674
                                                             ------------
         Total long-term liabilities                            7,538,341
                                                             ------------

 Stockholders' equity:
   Preferred stock; par value $0.01; 10,000,000
     shares authorized
     Series F Convertible; 300,000 shares authorized,
     193,829 shares issued and outstanding                          1,938
   Common stock; par value  $0.01; 100,000,000 shares
     authorized; 61,152,194 shares issued and outstanding         611,522
   Additional paid-in capital                                  17,839,618
   Retained earnings                                           (7,830,551)
                                                             ------------
         Total stockholders' equity                            10,622,527
                                                             ------------
         Total liabilities and stockholders' equity         $  22,546,328
                                                             ============

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

<PAGE>

            INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements of Operations
                                  (Unaudited)

                               Three        Three        Six          Six
                              Months       Months       Months       Months
                               Ended        Ended        Ended        Ended
                            January 31,  January 31,  January 31,  January 31,
                               2006         2005         2006         2005
                            -----------  -----------  -----------  -----------

 Net sales                  $ 9,088,258  $ 7,604,706  $17,136,805  $14,356,993

 Cost of sales                7,522,687    6,486,898   13,835,125   12,195,976
                             ----------   ----------   ----------   ----------
 Gross profit                 1,565,571    1,117,808    2,385,113    2,161,017
                             ----------   ----------   ----------   ----------

 Expenses:
 General and
   administrative expenses    1,223,055    8,595,249    2,385,113    9,392,298
 Amortization of
   customer base                135,512       90,341      271,024       90,341
                             ----------   ----------   ----------   ----------
                              1,358,567    8,685,590    2,656,137    9,482,639
                             ----------   ----------   ----------   ----------
 Income (loss) from
 operations                     207,004   (7,567,782)     645,543   (7,321,622)
                             ----------   ----------   ----------   ----------

 Other income (expense):
   Interest expense             (35,412)     (58,269)     (62,948)     (75,500)
   Interest expense -
     related party              (88,667)  (4,257,867)    (171,865)  (4,257,867)
   Interest income                  956           74        1,525          156
   Other income                  18,958          739       36,977       14,985
                             ----------   ----------   ----------   ----------
                               (104,165)  (4,315,323)    (196,311)  (4,318,226)
                             ----------   ----------   ----------   ----------
 Income (loss) before
 provision for income taxes     102,839  (11,883,105)     449,232  (11,639,848)

 Provision for income taxes      26,552      (21,363)     156,626       71,273
                             ----------   ----------   ----------   ----------
 Net income (loss)          $    76,287 $(11,861,742) $   292,606 $(11,711,121)
                            ===========   ==========  ===========   ==========

 Net income (loss)
 per share
   Basic                    $       .00   $    (0.28) $       .00   $    (0.55)
                            ===========   ==========  ===========   ==========
   Diluted                  $       .00   $    (0.28) $       .00   $    (0.55)
                            ===========   ==========  ===========   ==========
 Weighted average common
 shares
   Basic                     61,152,194   42,796,040   61,152,194   21,399,020
                            ===========   ==========  ===========   ==========
   Diluted                  282,981,194   42,796,040  282,981,194   21,399,020
                            ===========   ==========  ===========   ==========

  The accompanying notes are an integral part of these condensed consolidated
                            financial statements

<PAGE>

            INTEGRATED PERFORMANCE SYSTEMS, INC. AND SUBSIDIARIES
               Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)

                                                 Six Months Ended January 31,
                                                 ----------------------------
                                                      2006           2005
                                                  ------------   ------------
 Cash flows from operating activities:
 Net income                                      $     292,606  $ (11,711,121)
   Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                     553,802        484,070
     Stock based compensation                                -      7,600,000
     Non-cash interest expense from beneficial
       conversion feature                                    -      4,200,000
     Deferred tax expense                              126,303         71,273
     Changes in operating assets and liabilities:
       Trade accounts receivable                    (1,078,111)      (474,160)
       Inventory                                       203,001        162,125
       Prepaid expenses and other                      (59,738)       (33,100)
       Income tax receivable                           578,751              -
       Accounts payable                                468,316        219,642
       Accrued expenses                                (91,143)       104,118
                                                  ------------   ------------
    Net cash provided by operating activities          993,787        622,847
                                                  ------------   ------------

 Cash flows from investing activities:
   Merger costs                                              -       (209,805)
   Cash acquired through merger.                             -         78,762
   Acquisition of property and equipment               (83,264)       (46,386)
                                                  ------------   ------------
    Net cash used in investing activities              (83,264)      (177,429)
                                                  ------------   ------------

 Cash flows from financing activities:
   Net borrowings (payments) on line of credit      (1,455,560)       950,000
   Payments on long-term debt                         (308,219)      (907,525)
   Interest paid to related party                     (309,866)             -
   Borrowing on new term note                        2,250,000              -
   Collections on advances to related parties                -         37,972
                                                  ------------   ------------
    Net cash provided by financing activities          176,355         80,447
                                                  ------------   ------------
 Net increase in cash                                1,086,878        525,865
 Cash, beginning of period                             272,866        218,000
                                                  ------------   ------------
 Cash, end of period                             $   1,359,744  $     743,865
                                                  ============   ============

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

<PAGE>

             Integrated Performance Systems, Inc. and Subsidiaries
         Notes to Interim Condensed Consolidated Financial Statements
                               January 31, 2006
                                 (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.  Results of  operations
 for the periods presented are not  necessarily indicative of the results  to
 be expected for the year ending July 31, 2006.

 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 July 31, 2005, filed on January 5, 2006.


 NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 Inventory
 ---------

 Inventory consists of finished goods, work in process and raw materials  and
 is  priced  at  lower  of  cost  or  market  (determined product  by product
 based on  management's knowledge of current market conditions  and  existing
 sales  levels).  Cost of raw materials  is  determined on a weighted average
 basis;  cost  of work  in  process and finished  goods  is  determined using
 specific identification.  A valuation  allowance is established and adjusted
 periodically to provide for estimated obsolescence  based upon the aging  of
 inventory and market  trends. At January  31, 2006,  inventory  consisted of
 $766,656 in raw  materials, $759,041  in work  in process,  and $379,732  in
 finished goods, less a valuation allowance of $28,000.

 In November 2004  the Financial Accounting  Standards Board ("FASB")  issued
 Statement of  Financial Accounting  Standards No. 151, "Inventory Costs - an
 amendment of ARB  No. 43,  Chapter 4"  ("SFAS 151").   SFAS  151 amends  the
 guidance in  ARB No.  43, Chapter  4, "Inventory  Pricing," to  clarify  the
 accounting for abnormal amounts of idle facility expense, freight,  handling
 costs and wasted material (spoilage).  Among other provisions, the new  rule
 requires that  items  such as  idle  facility expense,  excessive  spoilage,
 double freight and rehandling costs be recognized as current-period  charges
 regardless of whether they meet the criterion of "so abnormal" as stated  in
 ARB No. 43.  Additionally,  SFAS 151 requires  that the allocation of  fixed
 production overheads  to the  costs of  conversion be  based on  the  normal
 capacity of the  production facilities.  SFAS 151  is  effective for  fiscal
 years beginning after June 15, 2005. Effective for the quarter ended October
 31, 2005, the Company adopted SFAS 151. The adoption did not have a material
 impact on  the Company's  consolidated financial  condition and  results  of
 operations.

 Revenue Recognition
 -------------------

 The Company generates revenue from custom built printed circuit boards, made
 to order using engineering and designs provided by the customer.  All orders
 are manufactured  to  specific industry  standards.  The Company  recognizes
 revenues when persuasive evidence of a  sales arrangement exists, the  sales
 terms are fixed and determinable, title  and risk of loss have  transferred,
 and collectibility  is  reasonably  assured,  generally  when  products  are
 shipped to the customer.

 The Company does not give rebates to any of its customers.  The Company does
 not have customer acceptance provisions; the Company does, however,  provide
 customers a limited  right of return  for defective  products.  Because  all
 orders are manufactured to specific industry standards and are  electrically
 tested to insure compliance with such  standards prior to shipment,  returns
 have  historically  been  minimal  and  the  amount  of  returns  has   been
 immaterial.


 Stock Based Employee Compensation
 ---------------------------------

 The  Company  accounts  for  employee  stock  options  in  accordance   with
 Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued  to
 Employees"   ("APB   25")   and   Financial   Accounting   Standards   Board
 Interpretation No. 44, "Accounting for Certain Transactions Involving  Stock
 Compensation - an interpretation of APB Opinion No. 25."   Under APB 25, the
 Company recognizes no compensation expense  related to employee or  director
 stock options when options are granted with exercise prices at, or in excess
 of, the fair value of the stock on the date of grant.

 The Company  has  adopted the  disclosure-only  provisions of  Statement  of
 Financial  Accounting  Standards  No.   123,  "Accounting  for   Stock-Based
 Compensation" ("SFAS 123") and  Statement of Financial Accounting  Standards
 No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure-
 an amendment of FASB Statement No. 123".  Under the provisions of SFAS  123,
 compensation expense is recognized based on the fair value of options on the
 grant date.

 During the three months ended January 31, 2006 and 2005, the Company did not
 recognize any  compensation  expense  under APB  25,  nor  did  the  Company
 recognize any compensation expense  under the disclosure-only provisions  of
 SFAS 123.

 Earnings Per Share
 ------------------

 Basic earnings per share  is computed using the  weighted average number  of
 common shares outstanding during the period.  Diluted earnings per share  is
 computed using  the weighted  average number  of  common and,  if  dilutive,
 potential  common shares  outstanding during  the period.  Potential  common
 shares consist of the incremental common  shares issuable upon the  exercise
 of stock options and the conversion  of the Company's convertible  preferred
 stock and notes payable.

 The following table  sets forth  the computation  of basic  and diluted  net
 income per share:

                                   For the Three Months    For the Six Months
                                    Ended January 31,       Ended January 31,
                                 ----------------------------------------------
                                   2006        2005         2006        2005
                                 --------    --------     --------    --------
 Numerator
 Numerator for basic earnings
   per share - net income
   (loss)                       $  76,287 $(11,861,742)  $ 292,606 $(11,711,121)
 Effect of dilutive securities
   on net income                   85,866            -     171,733            -
                                 --------  -----------    --------  -----------
 Numerator for diluted earnings
   per share                    $ 162,153 $(11,861,742)  $ 464,339 $(11,711,121)
                                 ========  ===========    ========  ===========
 Denominator
 Denominator for basic
   earnings per share          61,152,194   42,796,040  61,152,194   21,399,020
 Effect of dilutive securities 28,000,000            -  28,000,000            -
 Convertible preferred stock  193,829,000            - 193,829,000            -
                              -----------  ----------- -----------  -----------
 Denominator for diluted
   earnings per share         282,981,194   42,796,040 282,981,194   21,399,020
                              ===========  =========== ===========  ===========

 Basic earnings per share       $    0.00    $   (0.28)  $    0.00    $   (0.55)
                                 ========     ========    ========     ========
 Diluted earnings per share     $    0.00    $   (0.28)  $    0.00    $   (0.55)
                                 ========     ========    ========     ========

 Warrants to purchase a total of 531,667 shares of common stock were excluded
 from the  calculation of  diluted earnings  per share  because the  exercise
 prices were greater than the average  market prices and the effect would  be
 antidilutive.  Options to  purchase 40,000,000 shares  of common stock  were
 not considered as potentially dilutive securities because no new shares will
 be issued upon exercise of the options.  Also see Note 11.

 The Company currently does not have a sufficient number of authorized shares
 of common  stock to  allow for  the  conversion of  all of  its  outstanding
 convertible securities.

 Recent Accounting Pronouncements
 --------------------------------

 In December 2004 FASB issued Statement of Financial Accounting Standards No.
 123 (revised  2004), "Share-Based  Payment" ("SFAS  123(R)") which  requires
 companies to  recognize  in  the statement  of  operations  all  share-based
 payments to employees, including grants of  employee stock options based  on
 their fair  values.   Accounting for  share-based compensation  transactions
 using the intrinsic  method supplemented by  pro forma  disclosures will  no
 longer be permissible.  In  April  2005 the SEC  issued a  ruling that  SFAS
 123(R) is now effective for annual, rather than interim, periods that  begin
 for small pubic entities after  December 15, 2005.  The Company has not  yet
 completed its analysis of the impact of adopting SFAS 123(R).


 NOTE 3 - CONCENTRATIONS OF RISK

 At January 31, 2006, four customers  accounted for approximately 49% of  the
 total accounts receivable.  For the  three and six months ended  January 31,
 2006,  respectively,  these  customers  accounted  for approximately 60% and
 56%  of  net sales.  At  January  31, 2005,  five  customers  accounted  for
 approximately 52% of the total accounts receivable and for the three and six
 months ended January 31, 2005,  these customers accounted for  approximately
 50% of net sales.


 NOTE 4 - MERGER

 On November 24, 2004  a wholly owned subsidiary  of the Company merged  with
 Best Circuit Boards, Inc., d/b/a Lone Star Circuits "LSC"),  and  LSC became
 a wholly owned  subsidiary  of the Company.   Brad  Jacoby  ("Jacoby"),  the
 beneficial owner of LSC, acquired a controlling interest in the Company. The
 transaction has  been accounted  for as  a reverse  merger (the  transaction
 being referred to in this quarterly report as the "Merger").  This means the
 Merger has been treated  as if LSC acquired  the Company and,  consequently,
 the historical financial statements of  LSC became the historical  financial
 statements of the Company for all periods presented.


 NOTE 5 - INCOME TAXES

 The income tax provision for the three and six month periods ended January
 31, 2006 consists of the following:

                                  For the three months    For the six months
                                   ended January 31        ended January 31
                                ---------------------------------------------
                                  2006        2005         2006        2005
                                --------    --------     --------    --------
 Current expense               $  30,323   $       -    $  30,323   $       -

 Deferred expense              $  (3,771)  $ (21,363)   $ 126,303   $  71,273
                                --------    --------     --------    --------
                               $  26,552   $ (21,363)   $ 156,626   $  71,273
                                ========    ========     ========    ========

 Significant temporary differences  used in the  computation of deferred  tax
 assets and liabilities at January 31, 2006 are as follows:

 Deferred tax assets, current
   Allowance for bad debts                          $    10,937
   Accrued vacation                                      74,832
   Inventory reserves                                    10,352
                                                     ----------
                                                    $    96,121

 Deferred tax assets (liabilities), non-current
   Depreciation of property and equipment           $  (270,305)
   Net operating loss carry forwards                  2,957,682
   Valuation allowance                               (2,957,682)
   Customer base                                     (1,369,369)
                                                     ----------
                                                    $(1,639,674)
                                                     ==========

 In assessing the  realization of deferred  tax assets, management  considers
 whether it is  more likely than  not that some  or all  of the deferred  tax
 assets will  not be  realized.  The ultimate  realization  of  deferred  tax
 assets is dependent upon the existence of, or generation of, taxable  income
 in  the  periods  in  which  those  temporary  differences  are  deductible.
 Management considers  the scheduled  reversal of  deferred tax  liabilities,
 projected future taxable income and tax  planning strategies in making  this
 assessment.  Based upon historical taxable income and projections of  future
 taxable income  over  the periods  in  which  the deferred  tax  assets  are
 deductible, management does not believe that additional valuation allowances
 are necessary as of January 31, 2006.

 At January 31, 2006, the Company  had tax net operating loss carry  forwards
 ("NOLs") of approximately  $7,998,588 that  begin to  expire in  2018.   The
 utilization of these NOLs  is limited due  to the change  in ownership of  a
 majority of the outstanding shares of the Company. During the three and  six
 months ended January 31, 2006, the Company utilized NOLs totaling  $471,960,
 resulting in  a  decrease  in  the valuation  allowance  in  the  amount  of
 $173,880.   The decrease  to  the valuation  allowance  was recorded  as  an
 adjustment  to  goodwill  as  the  allowance  was  originally  recorded   in
 connection with the Merger.


 NOTE 6 - LINE OF CREDIT

 The Company has a $2 million line  of credit agreement ("LOC") with a  bank,
 which is due on demand,  bears interest at the  bank's prime rate (6.75%  at
 January 31, 2006)  and matures  October 31,  2006.   The LOC  is subject  to
 certain financial  and other  covenants, is  collateralized  by all  of  the
 Company's accounts receivable and inventory, and  is subject to a  guarantee
 by Jacoby in an  event of default under  the security agreement.  On October
 28, 2005, the  Company entered  into a  credit facility  with a  bank for  a
 $2,250,000 five-year term loan (the "Term Loan. The security arrangement for
 the Term Loan was also written to encompass the LOC.  Under the terms of the
 security agreement the Term Loan is  collateralized by all of the  Company's
 equipment and  the LOC  is collateralized  by  the Company's  inventory  and
 accounts receivable. The Term Loan bears interest at LIBOR + 2.15%, provides
 for monthly principal payments of $37,500 plus accrued interest, and matures
 on October 31, 2010.  Both the Term Loan and the LOC are subject to  certain
 financial and  other covenants.   An  event of  default under  the  security
 agreement  will  trigger  a  $2,000,000 personal  guarantee  of Jacoby.  The
 Company received the cash proceeds from  the Term Loan on November 4,  2005.
 The proceeds were  used pay  down the outstanding  balance on  the LOC  and,
 coupled with the LOC, will fund working capital.


 NOTE 7 - NOTES PAYABLE

 Long-term debt consists of the following at January 31, 2006:

 Note payable to financial institution payable in monthly
 installments of $7,035 including interest at 6.75%,
 matures March 31, 2006, collateralized by equipment              $   20,869

 Note payable to financial institution payable in monthly
 installments of $37,500 including interest at Libor + 2.15%,
 matures October 31, 2010, collateralized by inventory and
 accounts receivable                                               2,137,500

 Note payable to individual A, payable in monthly
 installments of $25,000, unsecured                                   50,000

 Note payable to individual B, payable in monthly
 installments of $10,000, unsecured                                   20,000

 Note payable to individual C, payable in monthly
 installments of $12,000, unsecured                                   24,000

 Other                                                                19,050
                                                                   ---------
                                                                   2,271,419
     Less current maturities of long-term debt                      (572,752)
                                                                   ---------
     Total long-term debt, less current maturities                $1,698,667
                                                                   =========

 On November 18, 2005, the Company  settled the notes payable to  individuals
 A, B  and  C for a  total of $235,000  including all accrued  interest.  The
 settlement amounts were determined to be  $125,000, $50,000 and $60,000  for
 individuals A, B  and  C respectively.  The  terms of the settlement include
 five equal monthly payments, with no additional interest charges.


 NOTE 8 - NOTES PAYABLE TO RELATED PARTY

 On November 24, 2004, the Company issued convertible promissory notes in the
 principal amounts of $1 million and $3.2 million (collectively, the "Notes")
 to Jacoby in conjunction with the Merger.  The Notes bore interest at 8% and
 were convertible into  common stock  at any time  at a  conversion price  of
 $0.15 per share.  Interest on the $1 million note was payable semi-annually,
 and the principal balance was due  November 30, 2007.  Interest on the  $3.2
 million notes  was payable  monthly,  and  the principal was originally  due
 February 28, 2005,  and  later extended  to July 31, 2005.  The  Notes  were
 secured by all assets  of the Company and LSC,  by the outstanding stock  of
 LSC and by  the Company  common stock owned  by D.  Ronald Allen  ("Allen"),
 former chief executive officer, controlling shareholder and director of  the
 Company.  On October 28, 2005,  both the Notes were refinanced and  combined
 into a single note  (the "New Note"), bearing  interest at 8% payable  semi-
 annually,  with  the principal  due  September 30, 2008.  The  New  Note  is
 convertible under  the same  terms and  secured by  the same  assets as  the
 Notes.


 NOTE 9 - RELATED PARTY TRANSACTIONS AND GUARANTEES

 The Company leases both of its operating facilities from JACCO  Investments,
 Inc. ("JACCO") an entity majority owned by Mr. Jacoby and his wife.  For the
 three and six months ended January  31, 2006 and 2005, the Company  incurred
 lease expense totaling $225,000 for the three month and $450,000 for the six
 month periods, respectively, related to these  operating leases.  LSC  began
 leasing its operating facilities from JACCO in 2001. The terms of the leases
 are  for  fifteen  and  ten  year  periods  ending  in 2010  and  2017.  LSC
 has guaranteed  payment  of  mortgage  notes  owed  by  JACCO  to  financial
 institutions.  At  January 31, 2006,  amounts owed by  JACCO under  mortgage
 note arrangements  guaranteed  by the  Company  and by  Jacoby  individually
 totaled approximately $4,800,000.  In the  event that JACCO defaults on  any
 of these loans, the Company would be required to make cash payments equal to
 the unpaid  principal  portion  of  the  mortgage  notes  plus  all  accrued
 penalties and interest.  The terms of the guarantees run concurrent with the
 notes and expire  February 2010  and January 2017.   The  guarantees do  not
 contain any recourse provisions or collateral  for the Company in the  event
 that the guarantee payments  are made.  The  current carrying amount of  the
 liability is $0

 Primarily because of the common control  between the Company and JACCO,  the
 guarantee of the indebtedness on the leased JACCO property and the  pledging
 of personal assets  of Jacoby and  his wife as  collateral for  the debt  of
 JACCO, the  Company is  exposed to  the  risk that  it  may be  required  to
 subsidize losses  of JACCO.  The mortgages  guaranteed  by the  Company  are
 secured by  the  leased  real  estate having  an  estimated  fair  value  of
 approximately $7 million.  The maximum exposure for the Company would be the
 carrying amount  of  the  variable-rate bank  loan  of  JACCO,  however  the
 Company's normal monthly lease payments under the lease agreement  discussed
 above are  sufficient  to cover  the  principal amounts  guaranteed  by  the
 Company.


 NOTE 10 - STOCK OPTIONS AND WARRANTS

 As of January 31, 2006, there were 500,000 outstanding warrants to  purchase
 common stock held by  certain employees.  These  warrants  have  an exercise
 price of $0.75 per share and expire November 5, 2009.

 As of January 31, 2006, there  were 31,667 outstanding warrants to  purchase
 common stock held by debt holders.  These warrants have an exercise price of
 $1.50 per share and expire February 8, 2011.


 NOTE 11 - COMMITMENTS AND CONTINGENCIES

 Litigation
 ----------
 The Company is  party to  the various legal  proceedings noted  below.   The
 Company  believes   that  the   ultimate  outcome   of  these   proceedings,
 individually and in the aggregate, will  not have a material adverse  effect
 on its  financial  position or  overall  trends in  results  of  operations,
 litigation is subject to inherent uncertainties.  If an  unfavorable  ruling
 were to occur, there exists the possibility of a material adverse impact  on
 (1) net income in the period in which the ruling occurs and (2) business and
 financial conditions.

 On December 5, 2005, IPS and LSC sued Allen and several entities  affiliated
 with Allen in  the 116th Judicial  District Court of  Dallas County,  Texas.
 IPS and LSC  assert claims  against Allen  for, among  other things,  fraud,
 breach of contract and  indemnity arising out of  the merger agreement  that
 effected the  Merger (the  "Merger Agreement").  LSC  seeks  indemnity  from
 Allen for approximately  $573,000 pursuant  to the  Merger Agreement,  which
 amount represents  the  settlement  payment made  to  Legacy  Bank  and  the
 attorneys' fees incurred in the C-Gate  lawsuit as defined in the  Company's
 annual report of Form 10-KSB for the year ended July 31, 2005, filed January
 5, 2006.  LSC also seeks indemnity for other as-yet unliquidated claims  for
 potential indemnifiable costs.  IPS and  LSC assert claims for  constructive
 trusts against the entity defendants regarding the IPS common stock held  by
 those entities as of the date of the  closing of the  Merger Agreement.  IPS
 and LSC assert that some or all of  the common stock held by these  entities
 was required to  be tendered  into escrow in  order to  satisfy claims  from
 indemnifiable costs under the Merger Agreement.

 On July 8, 2005 The Law Offices  of Gregory W. Mitchell, P.L.L.C. (the  "Law
 Firm") and Gregory W. Mitchell, individually ("Mitchell,"  and  collectively
 with the Law Firm,  the "Mitchell Plaintiffs"), the  sole member of the  Law
 Firm, sued IPS in the 160th Judicial District Court of Dallas County, Texas.
 The Mitchell Plaintiffs allege that IPS  entered into a fee agreement  under
 which the Law Firm was to provide all legal services for IPS in exchange for
 which IPS was to pay the  Law Firm, each month  for two years, $10,000  cash
 plus IPS common stock with a current value of $15,000.

 The Mitchell Plaintiffs  allege that, after  several months, IPS  repudiated
 the  fee  agreement  without  cause.  The  Law  Firm seeks  to  recover  the
 remaining fees due under the fee  agreement, approximately $200,000  in cash
 and $315,000 in common stock.  Mitchell additionally claims that Jacoby  and
 IPS intentionally inflicted  emotional distress on  Mitchell.  The  Mitchell
 plaintiffs also seek to recover exemplary damages and attorneys'  fees.  IPS
 disputes the claims and plans to vigorously defend the lawsuit.

 On November 18, 2003,  Gehan Properties II, Ltd.  ("Gehan") sued IPS,  Allen
 and other  entities, including  several  former IPS  subsidiaries,  alleging
 fraudulent transfer claims and is seeking $259,652 plus attorneys' fees  and
 interest.  Gehan alleges  that IPS's  subsidiary,  Performance  Interconnect
 Corp., fraudulently transferred its  stock in two  entities, PC Dynamics  of
 Texas, Inc. and  Varga Investments, Inc.,  to IPS in  December 1999.   Among
 other things, IPS asserts that the stock transferred to IPS was worthless at
 the time of  the transfers  and  therefore  the transfers  do not constitute
 fraudulent transfers.  Both parties  are currently conducting discovery  and
 the trial is scheduled for April 17, 2006.


 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,  including  statements   concerning
 expected income and  expenses and  the adequacy of  our sources  of cash  to
 finance current  and  future  operations.   These  expectations,  plans  and
 projections may or may not materialize and are subject to various risks  and
 uncertainties.   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; the  effects  of the  contingencies  described
 herein; the  availability of  capital; loss  of key  suppliers,  significant
 customers or key  management personnel; payment  defaults by our  customers;
 changes in  our  business  strategy or  development  plans;  and  the  risks
 described  from time  to  time  in  our  other  filings  with the Securities
 and  Exchange  Commission  ("SEC").  When  used in  this report,  the  words
 "may," "will,"  "believe," "expect,"  "project,"  "anticipate,"  "estimate,"
 "continue," "intend"  and  similar  expressions  are  intended  to  identify
 forward-looking statements.  These forward-looking statements speak only  as
 of the date of this report, and we have based our forward-looking statements
 on our current assumptions  and expectations about future  events.  We  have
 expressed our assumptions  and expectations in  good faith,  and we  believe
 there is a reasonable basis  for them.  However,  we cannot assure you  that
 our assumptions and expectations  will prove to be  accurate.  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

      IPS, through its  wholly owned subsidiary  LSC, designs, engineers  and
 manufactures technologically advanced printed circuit boards.  Our customers
 are generally  high-end  commercial  companies, the  military  and  military
 suppliers.   The commercial  markets are  typically characterized  by  time-
 sensitive, high technology prototypes  and short product  life cycles.   The
 military markets  require special  certifications and  are characterized  by
 high reliability and advanced technology and in many cases are formalized by
 long-term contracts.

      Our principal products are complex multi-layer printed circuit  boards,
 including antenna and  metalback radio  frequency circuit  boards.   Printed
 circuit boards serve as the basis  and foundation for electronic  equipment.
 The circuit  boards we  produce are  sold through  direct sales  people  and
 manufacturer's representatives  to  a  variety of  commercial  and  military
 markets.   The  commercial  markets and  their  applications  include  power
 systems,  telecommunications,  computer   hardware,  consumer   electronics,
 instrumentation and controls.   The military  applications for our  products
 include satellite communications, avionics,  missiles, smart bombs,  defense
 systems, radar detection and test equipment.

      We  can  satisfy  all  stages  of  manufacturing   for  our  customers,
 from  prototype  to  volume  production.  We offer our customers design  and
 engineering assistance in the early stage of their design to ensure the most
 efficient and cost-effective  production and  output.  We  offer  quick-turn
 production, which  can mean  the manufacture  of a  custom-designed  circuit
 board in significantly compressed lead times, from as little as 24 hours  to
 10 days.  We can also manufacture small quantities of printed circuit boards
 to assist our customers in the design and testing of their new products.  As
 the product moves  through its  development life cycle,  we can  ramp up  to
 volume production.

      On November 24, 2004  a wholly owned subsidiary  of the Company  merged
 with Best  Circuit  Boards,  Inc., d/b/a  Lone  Star  Circuits  ("Lone  Star
 Circuits" or  "LSC"),  and LSC  became  a  wholly owned  subsidiary  of  the
 Company.  Brad Jacoby  ("Jacoby"), the beneficial owner  of LSC, acquired  a
 controlling interest in the Company. The transaction has been accounted  for
 as a reverse  merger (the transaction  being referred to  in this  quarterly
 report as the "Merger").  This means the  Merger has been treated as if  LSC
 acquired the Company and, consequently, the historical financial  statements
 of LSC became  the historical financial  statements of the  Company for  all
 periods presented.

      The  following  discussion  provides  information  to  assist  in   the
 understanding of our financial condition and  results of operations for  the
 three and six months ended January 31, 2006 and 2005.  It should be read  in
 conjunction with the financial information for the year ended July 31, 2005,
 appearing in the Company's annual Form 10-KSB filed on January 5, 2006.

                            Results of Operations

      Revenues.  Net sales increased to $9,088,258 for the three months ended
 January 31,  2006,  from $7,604,706  for  the same  period  in 2005,  a  net
 increase of $1,483,552 or 20%.   Net sales increased to $17,136,805 for  the
 six months ended January  31, 2006 from $14,356,993  for the same period  in
 2005, a net increase of $2,779,812 or 19%.  We are continuing to see  strong
 demand for our  products from our  existing original equipment  manufacturer
 ("OEM") customers.  Sales to our top ten customers increased by 33% and  27%
 for the three and six months ended January 31, 2006 respectively compared to
 the same period in 2005.

      Gross Profit.  Gross profit for the three months ended January 31, 2006
 was $1,565,571  compared to  $1,117,808  for the  same  period in  2005,  an
 increase of $447,763 or 40%.  Gross profit for the six months ended  January
 31, 2006 was approximately $2,385,113, versus a gross profit of  $2,161,017.
 Gross margin improved from  15% for the three  and six months ended  January
 31, 2005 to 17% and  19%, respectively, for the  same period in the  current
 year.  The increase in gross  profit is due to  (1) the further increase  in
 sales resulting in fixed  costs being spread over  a larger number of  units
 produced, (2) higher demand for premium services, which typically command  a
 significantly higher  margin  and  (3) an  increase  in  sales  of  military
 products that also produce higher margins.

      Selling, general  and administrative  expenses.   Selling, general  and
 administrative ("SG&A")  expenses consist  primarily of  direct charges  for
 sales  promotion  and  marketing,  as  well   as  the  cost  of   executive,
 administrative  and   accounting  personnel,   and  related   expenses   and
 professional fees.   SG&A  expense decreased  to  $1,223,055 for  the  three
 months ended January 31, 2006, from $8,595,249 for the same period in  2005,
 a decrease of $7,372,194 or 86%.  The decrease is a result of the  recording
 of a non-cash compensation  expense of $7,600,000 in  2005 related to  stock
 options that is not recurring during the period ended January 31, 2006.  The
 increase in recurring SG&A expense is primarily attributable to an increased
 number  of  administrative  and  accounting  personnel,  increased  employee
 benefits and insurance expenses, and additional accounting, legal and  other
 professional fees relating to (1) the ongoing litigation as a result of  the
 Merger and (2) expenses related to filing and reporting as a public entity.

      Amortization of Customer  Base.  The  customer base was  recorded as  a
 result  of  the  Merger  on  November  24,  2004  and  accordingly,  $90,341
 representing two months of  amortization was recorded  during the three  and
 six months  ended  January 31,  2005.   Amortization  expense  increased  to
 $135,512 and  $271,024 for the three and six months ended January 31, 2006.

      Other Income (Expense),  Net.   Other income  (expense), net,  includes
 interest expense on notes payable and  notes payable to related parties,  as
 well  as  income  from  reclaiming  scrap  material.  Other  (expense),  was
 ($4,316,136) and ($4,333,367) for the three and six months ended January 31,
 2005 and included  $4,200,000 in non-cash  interest expense  related to  the
 beneficial conversion feature  of the notes  payable to  related party  that
 were issued in November 2004 in connection with the merger. Other  (expense)
 decreased to ($104,165) and  ($196,311) for the three  and six months  ended
 January 31, 2006.

      Income Tax Provision.  The income  tax provision increased to  $156,626
 for the six months ended January 31, 2006, from $71,273 for the same  period
 in the prior year. The increase in the  provision is due to the increase  in
 pre-tax income.

                       Liquidity and Capital Resources

      We  have  generally  financed  our  business  from  cash  generated  by
 operations and borrowings, and in prior periods our majority shareholder has
 loaned the Company operating capital at prevailing market rates of  interest
 or has guaranteed our indebtedness.  Our principal uses of cash have been to
 fund  working  capital,  meet   debt  service  requirements,  fund   capital
 expenditures and, during  the prior fiscal  year, to fund  Merger costs.  We
 expect that these  uses, with the  exception of funding  Merger costs,  will
 continue to be the principal demands on our cash in the future.

      We have current assets substantially in excess of current  liabilities.
 Based on our current level of  operations, we believe that cash provided  by
 operations along with funds available under our new five-year term loan (see
 "Indebtedness and guarantees" below) will be sufficient to fund our  working
 capital needs, finance  capital expenditures and  service our  debt for  the
 next twelve months and  beyond.  Capital expenditures  planned for the  next
 twelve months consist  of normal equipment  purchases necessary to  maintain
 current operating capacity and replace equipment  that may have reached  the
 end of its  useful life.  During  the  current fiscal  quarter, our  capital
 expenditures included manufacturing equipment that will allow us to  improve
 the throughput and increase the level of technology required to keep up with
 the complex products our customers  design.  We have historically also  been
 able to obtain financing for  equipment acquisitions under operating  leases
 with provisions for installment purchases at the end of the lease terms.  We
 anticipate that we will continue to be able to obtain this type of financing
 for future equipment needs.

      Cash  flows  from  operations.   Net  cash   of  $993,787  provided  by
 operations during  the  six  months ended  January  31,  2006  consisted  of
 $972,711 provided by net income as adjusted from non-cash items and  $21,076
 provided  by  working  capital.  This  compares  to  net  cash  provided  by
 operations of  $622,847 during  the same  period in  the prior  year,  which
 consisted of  $644,222 provided  by net  income  as adjusted  from  non-cash
 items, partially offset by $21,375 used by working capital.

      Cash used  for investing  activities.   Net cash  of $83,264  used  for
 investing activities during the six months ended January 31, 2006  consisted
 of  purchases  of  equipment.  Net  cash  of  $177,429  used  for  investing
 activities during the  same period in  the prior year  included $209,805  to
 fund Merger-related costs,  $78,762 cash  acquired through  the Merger,  and
 $46,386 for the purchase of property and equipment.

      Cash flows from financing activities.   Net cash provided by  financing
 activities during the  six months ended  January 31, 2006  was $176,355  and
 consisted of net payments of $309,866 on related party interest, payments of
 $308,219 on long-term debt and net increase in borrowings of $794,440 on the
 new bank note.   Net cash provided by  financing activities during the  same
 period in the prior year  included net borrowings on  our line of credit  of
 $950,000  and  collections  of  $37,972  on  advances  to  related  parties,
 partially offset by payments of $907,525 on long-term debt.

      Indebtedness and guarantees.  We have a $2 million line of credit  (the
 "LOC") described in Note 6 of our financial statements set forth in Part  I,
 Item 1 above.

      We have other indebtedness in the  amount of $2,271,419, some of  which
 was originally incurred by IPS prior  to the Merger. Current maturities  are
 $572,752.  Additionally,  we issued $4.2  million in convertible  promissory
 notes to Brad Jacoby in conjunction with the Merger in November 2004.  These
 notes were refinanced on October 28, 2005, and now bear 8% interest  payable
 semiannually, with the principal due September 30, 2008.

      On October 28, 2005 we entered into a credit facility with a bank for a
 $2,250,000 five-year  term loan  (the "Term  Loan").  The  Term  Loan  bears
 interest at  LIBOR  + 2.15%,  provides  for monthly  principal  payments  of
 $37,500 plus accrued interest,  and matures on  October 31, 2010.  The  Term
 Loan is collateralized  by all  of the Company's  equipment and  the LOC  is
 collateralized by the Company's inventory and accounts receivable.  Both the
 Term Loan and the LOC are subject to certain financial and other  covenants.
 An event of default under the  security agreement will trigger a  $2,000,000
 personal guarantee of Jacoby.  The Company received  the cash proceeds  from
 the Term Loan on November 4, 2005.  The proceeds were  used to pay down  the
 outstanding balance on the LOC and, coupled with the LOC, will fund  working
 capital in the future.

      We expect that  cash generated from  operations will  be sufficient  to
 fund payments on our indebtedness as it becomes due, or that we will be able
 to refinance the debt under similar terms.

      We  have  guaranteed  certain  indebtedness  of  related  parties,   as
 described in Note 9 to our financial statements.


 ITEM 3.   CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures.  Our management, with
 the participation  of  our  Chief  Executive  Officer  and  Chief  Financial
 Officer, has  reviewed and  evaluated the  effectiveness of  the design  and
 operation of our disclosure controls and procedures (as defined in Rule 13a-
 15(e) under the Securities Exchange Act of 1934) as of the end of the period
 covered by  this  report.  Management  has  concluded  that  our  disclosure
 controls and procedures are effective in ensuring that material  information
 is timely communicated  to appropriate management  personnel, including  the
 Chief  Executive  Officer  and  Chief  Financial  Officer,  to  enable  such
 personnel to evaluate information and determine the information required  to
 be included in our periodic SEC reports.


                         PART II - OTHER INFORMATION

 ITEM 1.   LEGAL PROCEEDINGS

      D. Ronald Allen  lawsuit.  On  December 5, 2005,  IPS and  LSC sued  D.
 Ronald Allen  and  several  entities affiliated  with  Allen  in  the  116th
 Judicial District Court of Dallas County, Texas.  IPS and LSC assert  claims
 against Allen  for,  among  other things,  fraud,  breach  of  contract  and
 indemnity arising out  of the Merger  Agreement.  LSC  seeks indemnity  from
 Allen for approximately  $573,000 pursuant  to the  Merger Agreement,  which
 amount represents  the  settlement  payment made  to  Legacy  Bank  and  the
 attorneys' fees incurred in  the C-Gate lawsuit.   LSC also seeks  indemnity
 for other as-yet unliquidated claims for potential indemnifiable costs.  IPS
 and LSC assert claims for constructive trusts against the entity  defendants
 regarding the IPS Common Stock held by those entities as of the date of  the
 closing of the Merger Agreement.  IPS and LSC assert that some or all of the
 Common Stock held by these entities was required to be tendered into  escrow
 in order  to  satisfy  claims from  indemnifiable  costs  under  the  Merger
 Agreement.

      Greg Mitchell lawsuit.  On July 8, 2005  The Law Offices of Gregory  W.
 Mitchell, P.L.L.C. (the  "Law Firm") and  Gregory W. Mitchell,  individually
 ("Mitchell," and collectively with the Law Firm, the "Mitchell Plaintiffs"),
 the sole member of  the Law Firm,  sued IPS in  the 160th Judicial  District
 Court of Dallas  County, Texas.  The  Mitchell plaintiffs  allege  that  IPS
 entered into a fee  agreement under which  the Law Firm  was to provide  all
 legal services for IPS in exchange  for which IPS was  to pay the Law  Firm,
 each month for two years, $10,000 cash plus IPS Common Stock with a  current
 value of $15,000.

      The  Mitchell  Plaintiffs  allege  that,  after  several  months,   IPS
 repudiated the fee agreement without cause.   The Law Firm seeks to  recover
 the remaining fees due  under the fee  agreement, approximately $200,000  in
 cash and $315,000 in Common Stock.  Mitchell additionally claims that Jacoby
 and  IPS  intentionally  inflicted  emotional  distress  on  Mitchell.   The
 Mitchell plaintiffs also  seek to recover  exemplary damages and  attorneys'
 fees.  IPS disputes the claims and plans to vigorously defend the lawsuit.

      Gehan lawsuit. On November 18, 2003 Gehan Properties II, Ltd. ("Gehan")
 sued IPS, Allen  and several former  IPS subsidiaries in  the 95th  Judicial
 District Court of Dallas County, Texas.   Gehan alleges fraudulent  transfer
 claims and is  seeking $259,652 plus  attorneys' fees and  interest.   Gehan
 alleges that IPS's  subsidiary Performance  Interconnect Corp.  fraudulently
 transferred its stock in two entities, PC Dynamics of Texas, Inc. and  Varga
 Investments, Inc., to IPS in December 1999.  Among other things, IPS asserts
 that the stock transferred to IPS was worthless at the time of the transfers
 and therefore the  transfers do  not constitute  fraudulent transfers.  Both
 parties are currently conducting  discovery and the  trial is scheduled  for
 April 17,, 2006.


 ITEM 5.   OTHER INFORMATION

 Our Common Stock  was traded over-the-counter through  December 21, 2005  on
 the  OTC  Bulletin  BoardR  (OTCBB)  under  the  symbol  "IPFS.OB"  and  was
 subsequently moved to the Pink Sheets,  trading under the symbol  "IPFS.PK",
 for failure to timely  file the annual  report on Form  10-KSB.  The  annual
 report on Form  10-KSB was filed  on January 5,  2006.  The  Company is  now
 current in its  filings with  the SEC  and is  eligible for  trading on  the
 OTCBB.


 ITEM 6.   EXHIBITS

  Exhibit
  Number   Description of Exhibit
  -------  ----------------------
   3.1*     Certificate of Incorporation of Espo's, Inc. filed with the
            New York Secretary of State, November 29, 1990 (filed as
            Exhibit 3.1 to the Company's Registration Statement on Form
            10-SB (File No. 000-30794), filed on April 12, 2000).

   3.2*     Certificate of Amendment of Certificate of Incorporation of
            the Company filed with the New York Secretary of State, July
            17, 1998 (filed as Exhibit 3.2 to the Company's Registration
            Statement on Form 10-SB (File No. 000-30794), filed on April
            12, 2000).

   3.3*     Certificate of Amendment of Certificate of Incorporation
            ofthe Company filed with the New York Secretary of State,
            October 27, 1998 (filed as Exhibit 3.3 to the Company's
            Registration Statement on Form 10-SB (File No. 000-30794),
            filed on April 12, 2000).

   3.4*     Certificate of Amendment of Certificate of Incorporation of
            the Company filed with the New York Secretary of State, March
            20, 2000 (filed as Exhibit 3.4 to the Company's Registration
            Statement on Form 10-SB (File No. 000-30794), filed on April
            12, 2000).

   3.5*     Certificate of Amendment of Certificate of Incorporation of
            the Company filed with the New York Secretary of State, April
            4, 2001 (filed as Exhibit 3.6 to the Company's Current Report
            on Form 8-K filed April 27, 2001).

   3.6*     Certificate of Amendment of Certificate of Incorporation of
            the Company filed with the New York Secretary of State, August
            12, 2002 (filed as Exhibit 3.7 to the Company's Annual Report
            on Form 10-KSB for the fiscal year ended November 30, 2003,
            filed April 19, 2004).

   3.7*     Certificate of Amendment of Certificate of Incorporation
            of the Company filed with the New York Secretary of State,
            February 10, 2003 (filed as Exhibit 3.8 to the Company's
            Annual Report on Form 10-KSB for the fiscal year ended
            November 30, 2003, filed April 19, 2004).

   3.8*     Certificate of Amendment of Certificate of Incorporation of
            the Company filed with the New York Secretary of State, May
            30, 2003 (filed as Exhibit 3.9 to the Company's Annual Report
            on Form 10-KSB for the fiscal year ended November 30, 2003,
            filed April 19, 2004).

   3.9*     Certificate of Amendment of Certificate of Incorporation
            of the Company filed with the New York Secretary of State,
            December 28, 2004 (filed as Exhibit 4.1 to the Company's
            Amendment to Current Report on Form 8-K/A filed February 7,
            2005).

   3.10*    Bylaws of the Company (filed as Exhibit 3.5 to the Company's
            Registration Statement on Form 10-SB (File No. 000-30794),
            filed on April 12, 2000).

  31.1**    Certification of  Brad Jacoby,  President  and Chief  Executive
            Officer,  pursuant  to Rules  13-14(a)  and  15d-14(a)  of  the
            Securities  Exchange  Act  of  1934,  as  adopted  pursuant  to
            Section 302 of the Sarbanes-Oxley Act of 2002.

  31.2**    Certification of Brad J. Peters, Vice President and Chief
            Financial Officer, pursuant to Rules 13a-14(a) and 15d-14(a)
            of the Securities Exchange Act of 1934, as adopted pursuant to
            Section 302 of the Sarbanes-Oxley Act of 2002.

   32**     Certifications of Brad Jacoby, President and Chief Executive
            Officer, and Brad J. Peters, Vice President and Chief
            Financial Officer, pursuant to 18 U.S.C. Section 1350, as
            adopted pursuant to Section 906 of the Sarbanes-Oxley Act
            of 2002.

 *    Incorporated herein by reference to the respective filings identified
      above.

 **   Filed herewith.


 The Company  filed two  (2) reports  on Form  8-K during  the quarter  ended
 January 31, 2006, as follows:

 1. dated November 18, 2005, covering the signing of a new security agreement
    with the Company's bank and the refinancing of a note payable to the CEO,
    both dated October 28, 2005.

 2. dated January 26, 2005, covering a press release announcing earnings  for
    the quarter ended October 31, 2005.


                                  SIGNATURE

      In accordance with the requirements of  the Securities Exchange Act  of
 1934, the registrant caused this  report to be signed  on its behalf by  the
 undersigned, thereunto duly authorized.

                          INTEGRATED PERFORMANCE SYSTEMS, INC.
                          (Registrant)

 Date: March 10, 2006     By:  /s/ BRAD J. PETERS
                          Brad J. Peters
                          Vice President and Chief Financial Officer
                          (Principal Financial Officer and Principal
                          Accounting Officer)