<SEQUENCE>1
<FILENAME>ims06300410qsb.txt
<PAGE>
                                  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 JUNE 30, 2004

                                       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 -- 37,262,638 shares as of June 30, 2004.



<PAGE>

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

Part I.   Financial Information

          Item 1.   Financial Statements (Unaudited)

                    Condensed consolidated balance sheets - June 30, 2004            2
                      and December 31, 2003

                    Condensed consolidated statements of income - Three months
                      ended June 30, 2004 and 2003; Six months ended
                      June 30, 2004 and 2003                                         3

                    Condensed consolidated statements of cash flows - Six
                      months ended June 30, 2004 and 2003                            4

                    Notes to condensed consolidated financial statements -
                      June 30, 2004                                                  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>


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

<TABLE>
<CAPTION>
                                                          June 30,         December 31,
                                                            2004                2003
                                                    ----------------     ----------------
<S>                                                 <C>                  <C>
             ASSETS
Current assets
    Cash                                             $      78,606        $     113,023
    Accounts receivable, net                               696,891              745,270
    Earned trade account                                   313,790              164,961
    Inventory                                              134,636              136,672
    Prepaid expenses                                        82,000                5,552
    Current portion of notes receivable                     42,934               49,919
                                                     --------------       --------------
          Total current assets                           1,348,857            1,215,397
                                                     --------------       --------------
Furniture and equipment
    Furniture and equipment                                927,596              823,386
       Less accumulated depreciation                      (486,615)            (424,654)
                                                     --------------       --------------
          Net furniture and equipment                      440,981              398,732
                                                     --------------       --------------
Other assets
    Restricted cash                                        121,422              301,230
    Notes receivable                                        42,933               49,736
    Membership lists                                     1,785,286            1,363,109
    Goodwill                                               535,478              535,478
    Investment in real estate                               43,000               43,000
    Other                                                  102,157               92,425
    Deferred income taxes                                  104,454              124,000
                                                     --------------       --------------
          Total other assets                             2,734,730            2,508,978
                                                     --------------       --------------
          Total assets                               $   4,524,568        $   4,123,107
                                                     ==============       ==============
             LIABILITIES
Current liabilities
    Accounts and notes payable                       $     503,678        $     517,946
    Other current liabilities                              107,538              162,019
                                                     --------------       --------------
          Total current liabilities                        611,216              679,965
                                                     --------------       --------------
Long-term liabilities
    Notes payable                                          681,914              621,890
    Notes payable to related parties                       272,465              193,329
    Deferred compensation plan                              64,045               64,045
                                                     --------------       --------------
          Total long-term liabilities                    1,018,424              879,264
                                                     --------------       --------------
          Total liabilities                              1,629,640            1,559,229
                                                     --------------       --------------
             STOCKHOLDER EQUITY
Common stock, $.0001 par value                               3,901                1,832
Paid in capital                                          3,729,459            3,152,806
Treasury stock                                            (670,002)            (353,201)
Retained earnings (deficit)                               (168,430)            (237,559)
                                                     --------------       --------------
          Total stockholder equity                       2,894,928            2,563,878
                                                     --------------       --------------
          Total liabilities and stockholder equity   $   4,524,568        $   4,123,107
                                                     ==============       ==============
</TABLE>




                                        2
<PAGE>


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                Three Months Ended            Six Months Ended
                                                     June 30,                      June 30,
                                          ---------------------------    --------------------------
                                              2004           2003            2004          2003
                                          ------------   ------------    ------------  ------------
<S>                                       <C>            <C>             <C>           <C>
Income

   Gross revenue                          $ 1,110,410    $ 1,013,231     $ 2,177,610   $ 1,965,643

   Cost of sales                                    0              0               0       141,593
                                          ------------   ------------    ------------  ------------
   Net revenue                              1,110,410      1,013,231       2,177,610     1,824,050
                                          ------------   ------------    ------------  ------------
Expenses

   Payroll, related taxes and
    employee benefits                         648,923        543,127       1,245,152     1,022,047

   General and administrative                 229,958        274,779         454,248       574,019

   Occupancy                                  106,437         66,028         209,655       128,786

   Selling                                     36,303         76,871          76,723       137,588

   Other                                       35,973         14,817         100,860        44,820
                                          ------------   ------------    ------------  ------------
      Total expenses                        1,057,594        975,622       2,086,638     1,907,260
                                          ------------   ------------    ------------  ------------
Income (loss) before income taxes              52,816         37,609          90,972       (83,210)

Income tax expense (benefit)                   12,304          9,402          21,843       (20,803)
                                          ------------   ------------    ------------  ------------
      Net income (loss)                   $    40,512      $  28,207     $    69,129   $   (62,407)
                                          ============   ============    ============  ============
      Net income (loss) per common share  $      .001   $       .002     $      .002   $     (.004)

Weighted average common
  shares outstanding                       36,243,256     16,462,148      36,243,256    16,462,148
</TABLE>






                                        3
<PAGE>


                      INTERNATIONAL MONETARY SYSTEMS, LTD.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           Six Months Ended
                                                                -----------------------------------
                                                                     June 30,             June 30,
                                                                       2004                 2003
                                                                --------------       --------------
<S>                                                             <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
          Net cash provided by (used in) operating activities          90,309              (88,054)
                                                                 -------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash withdrawn from escrow account                                300,000                    0
    Cash deposited in escrow account                                 (120,192)             (97,807)
    Capital expenditures                                              (61,210)             (25,531)
    Business acquisitions                                             (20,000)             (24,000)
                                                                 -------------       --------------
          Net cash used in investing activities                        98,598             (147,338)
                                                                 -------------       --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net borrowings (repayment) of debt                               (135,245)              82,507
    Net effect of Canadian currency translation                             0                8,602
    Treasury stock acquisitions                                      (316,801)             (25,000)
    Proceeds (costs) related to issuance of stock                     228,722              209,250
                                                                 -------------       --------------
          Net cash provided by financing activities                  (223,324)             275,359
                                                                 -------------       --------------
          Net increase (decrease) in cash                             (34,417)              39,967

Cash at beginning of period                                           113,023               22,667
                                                                 -------------       --------------
Cash at end of period                                            $     78,606        $      62,634
                                                                 =============       ==============


SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
    Business acquisitions
        Fair value of assets acquired                                 591,714              732,454
        Less:  Liabilities assumed                                    (11,300)            (226,410)
               Stock issued                                          (350,000)            (365,600)
               Note payable                                          (210,414)            (116,444)
                                                                 -------------       --------------
        Net cash paid for acquisitions                           $     20,000        $      24,000
                                                                 =============       ==============


</TABLE>

                                        4
<PAGE>


                      INTERNATIONAL MONETARY SYSTEMS, LTD.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2004

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 six month period ended June 30, 2004,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2004.

The balance sheet at December 31, 2003, 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, 2003 and filed on March 30, 2004.

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 ACQUISITION

On March 29, 2004, IMS purchased selected assets and liabilities of California
Barter Exchange of Modesto, California for $600,000, discounted to a present
value of $580,414. Terms of the acquisition include a down payment of $50,000,
in three payments of $20,000, $10,000 and $20,000 paid in March, April and May
of 2004, and 32 monthly payments of $6,000 and a final payment of $8,000
beginning in May 2004, including interest of $19,586 at 7.5%. IMS assumed a
note payable to Dell Financial Services. IMS issued 350,000 shares of its
common stock with a guarantee of $350,000.

The assets acquired include $68,714 for accounts receivable, $43,000 for
furniture and equipment, and $480,000 for the membership list.


                                       5

<PAGE>
                      INTERNATIONAL MONETARY SYSTEMS, LTD.

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

Results of Operations

On March 31, 2004, International Monetary Systems, Ltd. (IMS) purchased
the assets and client base of California Barter Exchange (CBX), located in
Modesto, CA. The CBX operation also served clients in the northern
California communities of Stockton and Fresno. The effects of the California
Barter Exchange acquisition are reflected in the IMS 2004 second quarter
financial information.

In the quarter ending June 30, 2004, the Company's gross revenue increased
9.6% to $1,110,410 compared to $1,013,231 for the second quarter of 2003.
The increased revenue was a result of the California Barter acquisition
described above coupled with additional internal growth of our Continental
Trade Exchange barter network.

In the second quarter of 2004, International Monetary Systems, Ltd. had
net income of $40,512, compared to net income of $28,207 for the same
period of 2003, an increase of 43.6%. Total expenses increased from
$975,622 in the second quarter of 2003 to $1,057,594 at the end of the
current period. The increased expenses were also attributed to the
acquisition of California Barter Exchange along with costs of investor
relations and consulting services.

The Company's operating profit before interest, taxes, depreciation and
amortization (EBITDA) totaled $153,051 the current quarter. This compares
to an EBITDA of $140,954 for the same period last year.

Year-to-date net revenue for the six-month period ending June 30, 2004
totaled $2,177,610 compared to $1,824,0503 for the same period in 2003, an
increase of 19.4%. Total expenses for the six-month period ending June
2004 were $2,086,638, compared to $1,907,260 for the same period in 2003,
an increase of 9.4%. Total year-to-date net income for the first six
months of 2004 was $69,129 compared to a loss of ($62,407) for the six
months ending June 30, 2003.

EBITDA for the six months ending June 30, 2004 totaled $272,100, compared
to EBITDA of $86,559 for the same period last year, an increase of 214%.

Liquidity and Sources of Capital

At the end of the second quarter of 2004, the Company's cash balance had
decreased to $78,606 from $113,023 at the end of 2003. This was a result
of the down payment for California Barter Exchange and investor relations
costs.

Subsequent Events

On July 20, 2004, the Company acquired the membership list of Barter
Network, Inc. of Springfield, Virginia. Details of this transaction are
available in the 8-K filed on August 3, 2004.

                                       6

<PAGE>
                      INTERNATIONAL MONETARY SYSTEMS, LTD.

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 - Two-for-One stock split for
                   shareholders of record on April 5, 2004.

     Item    3.   Defaults upon Senior Securities - None

     Item    4.   Submission of Matters to a Vote of Security Holders -
                   On June 23, 2004 the shareholders voted to amend the bylaws,
                   increasing the number of authorized shares to 300 million
                   shares of common stock and 20 million shares of preferred
                   stock.

     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 August 2, 2004 reporting the
                  acquisition of the assets of Barter Network, Inc.


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       August 3, 2004          /s/ Donald F. Mardak
          ----------------------   ---------------------------------------------
                                       Donald F. Mardak, President
                                       (Principal Executive Officer)


Date       August 3, 2004          /s/ Danny W Weibling
          ----------------------   ---------------------------------------------
                                       Danny W Weibling, CPA, Treasurer
                                       (Chief Financial Officer)

                                       7
<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:      August 3, 2004          /s/ Donald F. Mardak
           -----------------       ---------------------------------------------
                                       Donald F. Mardak, President
                                       (Chief Executive Officer)

                                       8
<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:      August 3, 2004          /s/ Danny W. Weibling
           -----------------       ---------------------------------------------
                                       Danny W. Weibling, Treasurer
                                       (Chief Financial Officer)

                                      9
<PAGE>

                        International Monetary Systems, Ltd.

                 Exhibit Index to Quarterly Report on Form 10-QSB
                      for the Quarter ended June 30, 2004



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 June 30, 2004
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

August 3, 2004