<SEQUENCE>1
<FILENAME>ims03310510qsb.txt
<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                                   (MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE PERIOD ENDED MARCH 31, 2005

                                       OR

[ ] 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    000-30853
                       -------------------

                      INTERNATIONAL MONETARY SYSTEMS, LTD.
             (Exact name of registrant as specified in its charter)

               Wisconsin                                     39-1924096
     --------------------------------              ---------------------------
     (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                      Identification No.)

                            16901 West Glendale Drive
                           New Berlin, Wisconsin 53151
                           ---------------------------
                    (Address of principal executive offices)
                                   (Zip Code)
                                 (262) 780-3640
            ---------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
          -------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods 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
                              ---                  ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.

Common Stock, $.0001 Par Value -- 40,086,404 shares as of March 31, 2005.



<PAGE>   2

<TABLE>
<CAPTION>
INDEX                                                                      PAGE NO.
                                                                           --------
<S>                                                                        <C>
INTERNATIONAL MONETARY SYSTEMS, LTD.

Part I.  Financial Information

        Item 1.   Financial Statements (Unaudited)

                  Condensed consolidated balance sheets - March 31, 2005
                    and December 31, 2004                                         2

                  Condensed consolidated statements of income - Three months
                    ended March 31, 2005 and 2004                                 3

                  Condensed consolidated statements of cash flows - Three
                    months ended March 31, 2005 and 2004                          4

                  Notes to condensed consolidated financial statements -
                    March 31, 2005                                                5

        Item 2.   Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                     6

        Item 3.   Quantitative and Qualitative Disclosure of Market Risk          7


Part II.  Other Information                                                       7

        Item 1.   Legal Proceedings

        Item 2.   Changes in Securities and Use of Proceeds

        Item 3.   Defaults upon Senior Securities

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

        Item 5.   Other Information

        Item 6.   Exhibits and Reports on Form 8-K

Signatures
</TABLE>



<PAGE>   3


                      INTERNATIONAL MONETARY SYSTEMS, LTD.
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
                                                   March 31,         December 31,
                                                     2005                2004
                                              ----------------     ----------------
<S>                                           <C>                  <C>
             ASSETS
Current assets
    Cash                                       $     587,696        $      86,669
    Accounts receivable, net                         757,734              852,825
    Earned trade account                             240,354              217,021
    Inventory                                        134,636              134,636
    Prepaid expenses                                  14,729               14,129
                                               --------------       --------------
          Total current assets                     1,735,149            1,302,280
                                               --------------       --------------
Furniture and equipment
    Furniture and equipment                          983,468              964,802
       Less accumulated depreciation                (588,066)            (552,637)
                                               --------------       --------------
          Net furniture and equipment                395,402              412,165
                                               --------------       --------------
Other assets
    Restricted cash                                   61,981              241,956
    Notes receivable                                       0               24,398
    Membership lists                               2,057,547            2,096,973
    Goodwill                                         535,478              535,478
    Investment in real estate                         31,000               31,000
    Other                                            118,775              111,475
    Deferred income taxes                            124,735              114,635
                                               --------------       --------------
          Total other assets                       2,929,516            3,155,915
                                               --------------       --------------
          Total assets                         $   5,060,067        $   4,870,360
                                               ==============       ==============
             LIABILITIES
Current liabilities
    Accounts and notes payable                 $     586,541        $     702,540
    Other current liabilities                        165,353              182,810
                                               --------------       --------------
          Total current liabilities                  751,894              885,350
                                               --------------       --------------
Long-term liabilities
    Notes payable                                  1,337,979              744,390
    Notes payable to related parties                 192,045              193,243
    Deferred compensation plan                        70,995               70,995
                                               --------------       --------------
          Total long-term liabilities              1,601,019            1,008,628
                                               --------------       --------------
          Total liabilities                        2,352,913            1,893,978
                                               --------------       --------------
             STOCKHOLDER EQUITY
Common stock, $.0001 par value                         4,006                4,006
Paid in capital                                    3,969,639            3,964,089
Treasury stock                                    (1,020,033)            (765,003)
Retained earnings (deficit)                         (246,458)            (226,710)
                                               --------------       --------------
          Total stockholder equity                 2,707,154            2,976,382
                                               --------------       --------------
          Total liabilities and
            stockholder equity                 $   5,060,067        $   4,870,360
                                               ==============       ==============
</TABLE>
                                        2

<PAGE>   4
                      INTERNATIONAL MONETARY SYSTEMS, LTD.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                              March 31,
                                                ---------------------------------
                                                      2005               2004
                                                --------------     --------------
<S>                                             <C>                <C>
Income

   Gross revenue                                $   1,142,748      $   1,067,201
                                                --------------     --------------
Expenses

   Payroll, related taxes & employee benefits         726,919            596,229

   General and administrative                         219,859            195,383

   Occupancy                                          110,761            122,578

   Selling                                             54,084             49,968

   Other                                               57,474             64,887
                                                --------------     --------------
         Total expenses                             1,169,097          1,029,045
                                                --------------     --------------
Income (loss) before income taxes                     (26,349)            38,156

Income tax expense (benefit)                           (6,600)             9,539
                                                --------------     --------------
         Net income (loss)                      $     (19,749)     $      28,617
                                                ==============     ==============
         Net income (loss) per common share     $       (.001)     $        .001

Weighted average common shares outstanding          38,517,363        31,923,584
</TABLE>



















                                        3
<PAGE>   5


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                 -----------------------------------
                                                    March 31,            March 31,
                                                      2005                 2004
                                                 --------------       --------------
<S>                                              <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
        Net cash provided by (used in)
           operating activities                         70,015               79,697
                                                  -------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash withdrawn from escrow account                 240,000              300,000
    Cash deposited in escrow account                   (60,025)             (60,065)
    Capital expenditures                               (18,666)              (7,545)
    Business acquisitions                                    0              (20,000)
                                                  -------------       --------------
        Net cash used in investing activities          161,309              212,390
                                                  -------------       --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings (repayment) of debt                 522,183              (55,816)
    Treasury stock acquisitions                       (255,030)            (309,051)
    Proceeds (costs) related to issuance of stock        5,550               77,720
                                                  -------------       --------------
        Net cash provided by financing activities      272,703             (287,147)
                                                  -------------       --------------
        Net increase in cash                           504,027                4,940

Cash at beginning of period                             83,669              113,023
                                                  -------------       --------------
Cash at end of period                             $    587,696        $     117,963
                                                  =============       ==============


SCHEDULE OF NONCASH INVESTING AND
   FINANCING ACTIVITIES:
    Business acquisitions
        Fair value of assets acquired                                       591,714
        Less:  Liabilities assumed                                          (11,300)
               Stock issued                                                (350,000)
               Note payable                                                (210,414)
                                                  -------------       --------------
        Net cash paid for acquisitions            $          0        $      20,000
                                                  =============       ==============
</TABLE>





                                       4
<PAGE>   6


                      INTERNATIONAL MONETARY SYSTEMS, LTD.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

March 31, 2005

NOTE A. - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
2005, are not necessarily indicative of the results that may be expected for
the year ended December 31, 2005.

The balance sheet at December 31, 2004, has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

For further information, refer to the consolidated financial statements and
footnotes thereto included in the company's 10KSB for the year ended December
31, 2004 and filed on March 30, 2005.

NOTE B - INVENTORY

Inventory consists primarily of fine art and other merchandise which the company
intends to sell. Inventory is carried at the lower of actual cost of acquisition
or fair value.


NOTE C - BUSINESS ACQUISITIONS

There were no business acquisitions in the first quarter of 2005.















                                       5

<PAGE>   7
                      INTERNATIONAL MONETARY SYSTEMS, LTD.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Results of Operations

In October of 2004, IMS management made a decision to invest in its
infrastructure by hiring a staff of outside salespeople and opening a new office
in the Greater Los Angeles area. Unlike the process of acquiring trade
exchanges, in which the costs of acquisition can be capitalized, all charges
incurred in the Los Angeles startup have been expensed. This resulted in lower
profits for the barter system in the first quarter of 2005. But management
believes that this move was in the best interests of the Company and will
provide long-term gains in both revenue and profitability.

In the quarter ending March 31, 2005, gross revenue increased 7% to $1,142,748
compared to $1,067,201 for the first quarter of 2004. In the first quarter of
2005, the Continental Trade Exchange barter business had a profit of $31,576,
compared to $126,762 in the same period of 2004. This represents a decrease of
$95,186. The reduction in profitability was primarily a result of the Company's
opening its new Los Angeles office. Startup costs for this venture represent
most of the decline in profits from last year.

Additional expenses of $50,254 for the parent holding company produced a net
loss of $19,729 for the first quarter of 2005. This compared to net income
of $28,617 for the first quarter of 2004.

Total expenses during the first quarter of 2005 increased from $1,029,045 in
the first quarter of 2004 to $1,169,097 at the end of the current period. The
increased expenditures were attributed to the additional overhead costs from
acquisitions made in 2004, expenses of opening the new Los Angeles office, and
investor relations consulting fees.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the three months ending March 31, 2005 totaled $84,342.


Liquidity and Sources of Capital

During the first quarter of 2005, the Company's cash balance grew to $587,696
from $83,669 on December 31, 2004. The increase in cash was derived from
proceeds of three private placements which were concluded in March of 2005.

Since the end of calendar year 2004, our current assets increased by $432,869
to $1,735,149. During the same period, our total assets increased $189,707
from $4,870,360 on December 31, 2004 to $5,060,067 on March 31, 2005.

During the first quarter of 2005, current liabilities decreased by $133,456 to
$751,894. This created a current-assets-to-liabilities ratio of 2.33 to 1.
Long-term debt increased by $592,391 and total liabilities increased by
$458,935 during the same period. This increase occurred because of funds
borrowed in the private placements described above. As a result, the debt to
equity ratio increased from 63% at the end of 2004 to 86% after the quarter
ending March 31, 2005. This is convertible debt, however, and may be converted
to equity in the future.


                                       6


<PAGE>   8
                      INTERNATIONAL MONETARY SYSTEMS, LTD.

Subsequent Events

On April 30, 2005, the Company concluded two acquisitions of trade exchanges:
Eagle Barter Exchange of Chattanooga, TN and United Trade Network of Reno, NV.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

The company monitors the impact of interest expense on its long-term debt on a
regular basis.


Part II.     Other Information

     Item    1.   Legal Proceedings - None

     Item    2.   Changes in Securities - None

     Item    3.   Defaults upon Senior Securities - None

     Item    4.   Submission of Matters to a Vote of Security Holders - None

     Item    5.   Other Information - None

     Item    6.   Exhibits and Reports on Form 8-K

            (a)   Exhibits

                  (99.1) Certification of Chief Executive Officer and Chief
                       Financial Officer pursuant to 18 U.S.C. section 1350

            (b)   Reports on Form 8-K

                  A Form 8-K was filed on May 13, 2005 reporting the
                  acquisition of the assets of Eagle Barter Exchange of
                  Chattanooga, TN..

                  A Form 8-K was filed on May 13, 2005 reporting the
                  acquisition of the assets of the United Trade Network
                  office in Reno, Nevada.
















                                     7


<PAGE>
Signatures

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

                                        International Monetary Systems, Ltd.
                                   ---------------------------------------------
                                                    (Registrant)
                                                     ----------

Date       May 13, 2005            /s/ Donald F. Mardak
          ----------------------   ---------------------------------------------
                                          Donald F. Mardak, President
                                          (Principal Executive Officer)


Date       May 13, 2005            /s/ Danny W Weibling
          ----------------------   ---------------------------------------------
                                           Danny W Weibling, CPA, Treasurer
                                           (Chief Financial Officer)


































                                       8


<PAGE>
                                CERTIFICATIONS

I, Donald F. Mardak, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of International
Monetary Systems, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      (a) designed such disclosure controls and procedures to ensure that
      material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this quarterly report is
      being prepared;

      (b) evaluated the effectiveness of the registrant's disclosure controls
      and procedures as of a date within 90 days prior to the filing date of
      this quarterly report (the "Evaluation Date"); and

      (c) presented in this quarterly report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
      evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

      (a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      (b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:      May 13, 2005            /s/ Donald F. Mardak
           -----------------       ---------------------------------------------
                                       Donald F. Mardak, President
                                       (Chief Executive Officer)

<PAGE>

I, Danny W. Weibling, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of International
Monetary Systems, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      (a) designed such disclosure controls and procedures to ensure that
      material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this quarterly report is
      being prepared;

      (b) evaluated the effectiveness of the registrant's disclosure controls
      and procedures as of a date within 90 days prior to the filing date of
      this quarterly report (the "Evaluation Date"); and

      (c) presented in this quarterly report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
      evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

      (a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

      (b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:      May 13, 2005            /s/ Danny W. Weibling
           -----------------       ---------------------------------------------
                                       Danny W. Weibling, Treasurer
                                       (Chief Financial Officer)


<PAGE>

                        International Monetary Systems, Ltd.

                 Exhibit Index to Quarterly Report on Form 10-QSB
                      for the Quarter ended March 31, 2005



Exhibit
 No.             Exhibit Description

(99.1)    Certification of Chief Executive Officer and Chief Financial
          Officer pursuant to 18 U.S.C. section 1350




                                                                    Exhibit 99.1


                             CERTIFICATION PURSUANT TO
                              18 U.S.C. SECTION 1350
                              AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of International Monetary Systems,
Ltd. ("Company") on Form 10-QSB for the period ending March 31, 2005
as filed with the Securities and Exchange Commission ("Report"), we,
Donald M. Mardak, Chief Executive Officer of the Company, and Danny W.
Weibling, Chief Financial Officer of the Company, jointly and severally
certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906
of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

/s/ Donald M. Mardak
    -----------------------
    Donald M. Mardak
    Chief Executive Officer


/s/ Danny W. Weibling
    -----------------------
    Danny W. Weibling
    Chief Financial Officer

May 13, 2005