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<FILENAME>ims09300110qsb.txt

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                                  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 SEPTEMBER 30, 2001

                                       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 No N/A - This is first required filing.

                      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 -- 2,440,163 shares as of September 30, 2001.



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<TABLE>
<CAPTION>
INDEX                                                                                       PAGE NUMBER
                                                                                            -----------
<S>                                                                                         <C>
INTERNATIONAL MONETARY SYSTEMS, LTD.

Part I.   Financial Information

          Item 1.     Financial Statements (Unaudited)

                      Condensed consolidated balance sheets - September 30, 2001                   2
                        and December 31, 2000

                      Condensed consolidated statements of income - Three months
                        ended September 30, 2001 and 2000; Nine months ended
                        September 30, 2001 and 2000                                                3

                      Condensed consolidated statements of cash flows - Nine
                        months ended September 30, 2001 and 2001                                   4

                      Notes to condensed consolidated financial statements -
                        September 30, 2001                                                         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                       6


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>


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                      INTERNATIONAL MONETARY SYSTEMS, LTD.

                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 September 30,         December 31,
                                                                                      2001                 2000
                                                                                  (Unaudited)           (Audited)
                                                                              -----------------    -----------------
<S>                                                                           <C>                  <C>
             ASSETS
Current assets
    Cash                                                                       $      49,676        $     231,704
    Accounts receivable, net                                                         445,448              204,974
    Earned trade account                                                             194,626              162,082
    Inventory                                                                         97,585              105,985
                                                                               --------------       --------------
          Total current assets                                                       787,335              704,745
                                                                               --------------       --------------
Furniture and equipment
    Furniture and equipment                                                          716,515              280,228
       Less accumulated depreciation                                                (233,212)            (174,678)
                                                                               --------------       --------------
          Net furniture and equipment                                                483,303              105,550
                                                                               --------------       --------------
Other assets
    Goodwill and membership lists                                                    406,160               46,866
    Investment in real estate                                                         38,000               38,000
    Other                                                                             36,084               16,707
                                                                               --------------       --------------
          Total other assets                                                         480,244              101,573
                                                                               --------------       --------------
          Total assets                                                         $   1,750,882        $     911,868
                                                                               ==============       ==============
             LIABILITIES
Current liabilities
    Accounts and notes payable                                                 $     287,978        $      34,781
    Other current liabilities                                                         74,887               68,247
                                                                               --------------       --------------
          Total current liabilities                                                  362,865              103,028
                                                                               --------------       --------------
Long-term liabilities
    Notes payable to banks                                                           279,726               85,617
    Notes payable to related parties                                                  79,742               42,660
                                                                               --------------       --------------
          Total long-term liabilities                                                359,468              128,277
                                                                               --------------       --------------
          Total liabilities                                                          722,333              231,305
                                                                               --------------       --------------
             STOCKHOLDER EQUITY
Common stock, $.0001 par value                                                           244                  219
Paid in capital                                                                    1,127,372              736,935
Retained earnings (deficit)                                                          (99,067)             (56,591)
                                                                               --------------       --------------
          Total stockholder equity                                                 1,028,549              680,563
                                                                               --------------       --------------
          Total liabilities and stockholder equity                             $   1,750,882        $     911,868
                                                                               ==============       ==============
</TABLE>



                                       2

<PAGE>   4


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                             Three Months Ended                   Nine Months Ended
                                                                September 30,                        September 30,
                                                     ---------------------------------     --------------------------------
                                                           2001                2000              2001               2000
                                                     --------------     --------------     --------------    --------------
<S>                                                  <C>                <C>                <C>               <C>
Income

   Gross revenue                                     $     906,748      $     573,188      $   2,169,902     $   1,648,385

   Cost of sales                                           316,169            190,802            813,315           531,988
                                                     --------------     --------------     --------------    --------------
   Net revenue                                             590,579            382,386          1,356,587         1,116,397
                                                     --------------     --------------     --------------    --------------
Expenses

   Payroll, related taxes and employee benefits            325,434            229,448            852,327           693,578

   General and administrative                              112,391             43,864            297,379           210,912

   Occupancy                                                40,833             36,920            110,620           110,501

   Selling                                                  55,879             27,354            128,921           118,529

   Other                                                    15,684              3,695             24,056             9,806
                                                     --------------     --------------     --------------    --------------
         Total expenses                                    550,221            341,281          1,413,303         1,143,326
                                                     --------------     --------------     --------------    --------------
Income (loss) before income taxes                           40,358             41,105            (56,716)          (26,929)

Income tax expense (benefit)                                     0                  0            (14,240)                0
                                                     --------------     --------------     --------------    --------------
         Net income (loss)                           $      40,358      $      41,105     $      (42,476)    $     (26,929)
                                                     ==============     ==============     ==============    ==============
         Net income (loss) per common share          $         .02      $         .02     $         (.02)    $        (.01)

Weighted average common shares outstanding               2,367,313          2,136,704          2,367,313         2,136,704
</TABLE






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<PAGE>   5


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        Nine Months Ended
                                                                              --------------------------------------
                                                                                 September 30,        September 30,
                                                                                     2001                 2000
                                                                              -----------------    -----------------
<S>                                                                           <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
          Net cash provided by (used in) operating activities                         25,224              (81,975)
                                                                                -------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                             (65,664)             (23,563)
    Business acquisitions                                                           (701,000)                   0
                                                                                -------------       --------------
          Net cash used in investing activities                                     (766,664)             (23,563)
                                                                                -------------       --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings (repayment) of debt                                               177,594               40,550
    Net borrowings (repayment) of related party debt                                  (8,645)              15,990
    Net Proceeds (costs) related to issuance of stock                                390,463              (29,447)
                                                                                -------------       --------------
          Net cash provided by financing activities                                  559,412               27,093
                                                                                -------------       --------------
          Net (decrease) in cash                                                    (182,028)             (78,445)

Cash at beginning of period                                                          231,704              101,505
                                                                                -------------       --------------
Cash at end of period                                                           $     49,676        $      23,060
                                                                                =============       ==============
</TABLE>

                                       4


<PAGE>   6


                      INTERNATIONAL MONETARY SYSTEMS, LTD.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

September 30, 2001

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 and nine month periods ended
September 30, 2001, are not necessarily indicative of the results that may be
expected for the year ended December 31, 2001.

The balance sheet at December 31, 2000, 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 Registration Statement Form SB-2
(File No. 333-94597, initially effective July 25, 2000), and post-effective
amendment no. 1, effective April 4, 2001.

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.


                                      5


<PAGE>   7

                      INTERNATIONAL MONETARY SYSTEMS, LTD.

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

Results of Operations

On September 1, 2001, International Monetary Systems, Ltd. purchased the assets
of Tradius Corporation, a barter network located in San Jose, CA. In addition to
the client base of more than 1,000 members, IMS acquired the Tradius web hosting
hardware and software along with several patents pending. In the quarter ending
September 30, 2001, gross revenue increased 58% to $906,748 compared to $573,188
for the third quarter of 2000. Net revenue increased 54% in the third quarter of
2001 to $590,578, up $208,193 from the same period of 2000. The third quarter
2001 gross revenue also increased by 18% over the $765,101 generated in the
second quarter of 2001, and the third quarter net revenue was up by 29% from
$457,490 in the second quarter. The primary reason for the increases was the
acquisition of Tradius Corporation plus the earlier acquisitions of other new
business operations described in the second quarter 2001 10Q-SB. These were
Trade Systems Interchange of Rohnert Park, CA; JM Graphics of New Berlin, WI;
and the startup of our new Canadian subsidiary, Continental Trade Exchange of
Canada, Ltd.

In the third quarter of 2001, the Continental Trade Exchange barter business
had a profit of $52,071. The JM Graphics pre-press division, which was acquired
in April of this year, had a loss of $11,713. Continuing our cost-reducing
procedures for this division, the third quarter loss was about 30% of the loss
suffered in the second quarter of 2001. Management believes that this trend will
continue for the rest of the year and this pre-press division will show a profit
in the fourth quarter.

Total expenses during the third quarter of 2001 increased from $341,281 in the
third quarter of 2000 to $550,221 at the end of the current period. The
increased expenses were also attributed to the recent acquisitions. The
Company's operating income was approximately the same, with a profit of $40,358
in the third quarter of 2001 compared to $41,105 in the same period last year.
Excluding the JM Graphics division figures, the Company's core business of the
barter network increased profits by 17%. Furthermore, the overall profit of
$40,358 in the third quarter of 2001 compares to a loss of $33,355 for the
second quarter of this year. There were no unordinary increases in expenses in
the third quarter of 2001, as all of these increased proportionately with the
increased payroll and overhead of the acquired businesses.

For the nine-month period ending on September 30, 2001, gross revenues increased
by 32% to $2,169,902 compared to $1,648,385 for the same nine-month period in
2000. In the first nine months of year 2000, the Continental Trade Exchange
barter division had an operating loss of $26,929. For the same period in 2001,
the barter network had a loss of just $3,513. The JM Graphics pre-press
division, however, incurred a loss of $41,490, creating the majority of the 2001
nine-month loss of $42,475. The Company forecasts that all divisions will have
operating profits in the fourth quarter of this year.

Liquidity and Sources of Capital

During the third quarter of 2001, cash decreased by $53,824 as a result of
higher operating expenses, capital expenditures, and a $100,000 down payment
made for the acquisition of the assets of Tradius Corporation in California.

During the period ending September 30, 2001, an additional 1,000 shares were
sold in the company's continuing initial public offering of its stock, producing
an increase in capital of $5,400, net of issuance costs. Remaining negative cash
flow was offset by net borrowings on bank and credit lines and by loans from
officers.

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. Proceeds of the public offering referred to above may be used in
part to reduce the company debt load.

                                       6



<PAGE>   8

                      INTERNATIONAL MONETARY SYSTEMS, LTD.


PART II.     Other Information

ITEM    1.   Legal Proceedings - None

ITEM    2.   Changes in Securities - See Exhibit I

ITEM    3.   Defaults upon Senior Securities - None

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

ITEM    5.   Other Information

International Monetary Systems, Ltd. (IMS) has embarked upon an expansion plan
that will be achieved through the acquisitions of other barter systems and
related businesses. To begin this process, the Company purchased the assets of
Trade Systems Interchange (TSI) in April 2001. TSI was a well-established barter
network located in Rohnert Park, CA. At the same time Danny W. Weibling, CPA,
one of the former owners of TSI, was appointed as the Chief Financial Officer of
International Monetary Systems, Ltd.

On April 1, 2001, the Company also purchased the capital stock of JM Graphics,
Inc., a pre-press company located in New Berlin, WI. In addition, IMS created a
new Canadian corporation, Continental Trade Exchange of Canada, Ltd., through
which it has started a new barter system with two offices in Ontario Province.
These are located in Ottawa and Durham, Ontario, two areas where a former trade
exchange has ceased operations.

On September 1, 2001, the Company purchased the assets of Tradius Corporation.
Tradius (formerly known as TradeWorld) is located in San Jose California and has
been operating a barter network for over 15 years.

As a result of these acquisitions, the Continental Trade Exchange barter network
now services more than 4,000 clients out of eight offices in the United States
and Canada.


ITEMI    6.   Exhibits and Reports on Form 8-K

The company did not file any reports on Form 8-K during the three months ended
September 30, 2001.



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          January 10, 2002     /s/ Donald F. Mardak
          ----------------------   -------------------------------------
                                          Donald F. Mardak, President
                                          (Principal Executive Officer)


Date          January 10, 2002     /s/ Danny W Weibling
          ----------------------   ---------------------------------------------
                                          Danny W Weibling, CPA, Treasurer
                                          (Chief Financial Officer)






                                       7
<PAGE>   9

                     INTERNATIONAL MONETARY SYSTEMS, LTD.


SCHEDULE I - USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING

Pursuant to Securities Act Rule 463, the following information (as identified
in paragraphs (f)(2) through (f)(4) of Regulation S-B Item 701) is provided
concerning the initial public offering ("Offering") of its common stock, par
value $0.0001 per share ("Common Stock"), conducted by International Monetary
Systems, Ltd. ("Company"), pursuant to a registration statement on Form SB-2
under the Securities Act of 1933 (File No. 333-94597), which initially became
effective as of July 25, 2000.

     (f)(2) through (f)(4)(i): The offering commenced as of July 25, 2000, and
     remained ongoing as of September 30, 2001.

     (f)(4)(ii): The managing underwriter of the Offering is J.E. Liss &
     Company, Inc. d/b/a Liss Financial Services, of Milwaukee, Wisconsin.

     (f)(4)(iii) through (f)(4)(iv): 1,150,000 shares of Common Stock were
     registered on Form SB-2, of which 1,000,000 are included in the Offering;
     all such shares were registered for the account of the Company; the
     aggregate price of the Common Stock registered (calculated at $6.00 per
     share, the initial public offering price) was $6,900,000; during the period
     from July 25, 2000 through September 30, 2001, an aggregate of 64,360
     shares were sold in the Offering for an aggregate gross price of
     $380,160.00.

     (f)(4)(v): From July 25, 2000 through September 30, 2001, the Company
     incurred the following expenses in connection with the Offering:

          Brokers' commissions/expense allowance              $   11,796.00
          Legal and accounting fees and expenses                  82,935.75
          Printing/SEC filings (EDGAR)                            26,433.77
          Other expenses                                           9,446.60
                                                              --------------
               Total expenses                                 $  130,612.12
                                                              ==============

     None of the above expenses were paid, directly or indirectly, to directors
     or officers of the Company, or to their affiliates, or to persons owning
     ten percent or more of any class of equity securities of the Company, or
     to affiliates of the Company.

    (f)(4)(vi) through (f)(4)(vii): After deducting the total expenses reported
     above, net proceeds of the Offering received by the Company from July 25,
     2000 through September 30, 2001 were $249,547.88. During the third quarter
     of 2001 $500,000.00 was paid for the purchase of the assets of Tradius
     Corporation. The purchase price consisted of $100,000.00 cash and 66,667
     shares of Common stock valued at $400,000.00. As of September 30, 2001,
     the net offering proceeds less amounts used in business acquisitions and
     operations were held by the Company in its cash accounts, pending future
     application.





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