UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[x]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES ACT OF 1934
                 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2002

                                       OR

[ ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES ACT OF 1934
            FOR THE TRANSITION PERIOD FROM ___________TO ____________

                        COMMISSION FILE NUMBER: 000-8880

                            THE BANKER'S STORE, INC.
             (Exact name of registrant as specified in its charter)

           NEW YORK                                              11-2196303
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                  1535 MEMPHIS JUNCTION ROAD, BOWLING GREEN, KY
       42101 (Address, including zip code, of principal executive offices)

                                 (270) 781-8453
              (Registrant's telephone number, including area code)

     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 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
                                              ---     ---

                      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 practicable date.

     Common stock, par value $0.01, 14,947,215 shares outstanding as of October
10, 2002.

<PAGE>


                            THE BANKER'S STORE, INC.

                                   FORM 10-QSB

                                 AUGUST 31, 2002

                                      INDEX

                         PART I - FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

         See financial statements beginning on page F-1.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATION

The matters discussed in this management's  discussion and analysis of financial
condition  and results of operations  contain  forward-looking  statements  that
involve  risks and  uncertainties.  The  Company's  actual  results could differ
materially from those discussed here.  Factors that could cause or contribute to
such  differences are discussed  elsewhere in this annual report on Form 10-QSB.
The Company disclaims,  any intent or obligation to update these forward-looking
statements.

OVERVIEW

The Banker's Store, Inc.  ("Store") was established in 1968. It remained dormant
for many years until it completed the  acquisition  of B.G.  Banking  Equipment,
Inc.,  ("B.G.  Banking")  and  Financial  Building  Equipment  Exchange,   Inc.,
("FBEE").  We are now in the  business of buying,  selling,  and trading new and
refurbishing  financial  equipment for banks and other  financial  institutions.
Commencing  in June 2001, we entered the office  equipment and furniture  retail
business.  We market  products  throughout the United States  primarily  through
direct sales to financial  institutions and other distributors  supported by our
direct  sales force and  soliciting  new  contacts  through our  presence on the
Internet.

We anticipate  that our results of operations may fluctuate for the  foreseeable
future  due to several  factors,  including  whether  and when new  products  at
competitive  prices are  obtained  and sources of good used  banking and banking
related  equipment and furniture  become available at favorable  prices,  market
acceptance  of current or new  products,  delays,  or  inefficiencies,  shipment
problems,   seasonal  customer  demand,   the  timing  of  significant   orders,
competitive  pressures  on  average  selling  prices  and  changes in the mix of
products sold.

Operating  results would also be adversely  affected by a downturn in the market
for our current and future products, order cancellations,  or order rescheduling
or  remanufacturing  or delays.  We  purchase  and resell  new  merchandise  and
remanufacture  and ship our other products  shortly after receipt of orders.  We
have not developed a significant backlog for such products and do not anticipate
developing a material backlog for such products in the future.

Because we plan to increase our operating expenses,  primarily for personnel and
activities  supporting  newly-introduced  products,  new product development and
entering new markets,  our operating results would be adversely  affected if our
sales did not correspondingly increase or if our product development efforts are
unsuccessful or are subject to delays.

We  may  not be  able  to  sustain  revenue  growth  or our  existing  level  of
profitability  on a quarterly or annual basis and our operating  results may not
be consistent with predictions, if any, made by securities analysts.



                                       2
<PAGE>


SUMMARY OF  SIGNIFICANT  ACCOUNTING  POLICIES,  RELATED PARTY  TRANSACTIONS  AND
CONTINGENCIES:

Use of estimates:
                  Our  discussion  and analysis of our  financial  condition and
                  results   of   operations   are  based   upon  our   condensed
                  consolidated financial statements, which have been prepared in
                  conformity with accounting  principles  generally  accepted in
                  the  United  States  of  America.  The  preparation  of  these
                  condensed  consolidated  financial  statements  requires us to
                  make estimates and judgments that affect the reported  amounts
                  of assets,  liabilities,  revenues and  expenses,  and related
                  disclosures  of  contingent  assets  and  liabilities.  On  an
                  on-going  basis,  we evaluate our estimates,  including  those
                  related to accounts  receivable,  inventories,  equipment  and
                  improvements,  income  taxes  and  contingencies.  We base our
                  estimates  on  historical  experience  and  on  various  other
                  assumptions  that are  believed  to be  reasonable  under  the
                  circumstances,  the results of which form the basis for making
                  judgments  about the carrying value of assets and  liabilities
                  that are not  readily  apparent  from  other  sources.  Actual
                  results may differ those estimates under different assumptions
                  or conditions.

Related party transactions:
                  On August 1,  1998,  the  Company  entered  into a  three-year
                  operating lease with our President and principal  stockholder,
                  Paul Clark,  for the lease of an  aggregate  of 23,976  square
                  feet of office and warehouse  space located in Bowling  Green,
                  Kentucky. The lease provides for a monthly rent of $5,000 plus
                  applicable real estate taxes and maintenance expenses. We have
                  extended the lease through August 2004 under the same terms.

                  On  September  20,  2002,  Paul Clark  purchased  the building
                  currently  leased in Bowling Green,  Kentucky for $225,000 and
                  is leasing the building to the Store for $2,200 per month.

Contingencies:
         Private placement - B.G. Banking:
                  Prior to the  Store's  reverse  merger  with B.G.  Banking and
                  FBEE,  B.G Banking  offered  and  received  subscriptions  for
                  126,500  shares  of its  common  stock  at  $1.00  per  share.
                  Subsequent to the date of the reverse merger,  the subscribers
                  of shares of B.G. Banking's common stock were offered and they
                  received  shares of common  stock in the Store at a ratio of 1
                  share  of B.G.  Banking  common  stock  to 1.5  shares  of the
                  Store's



                                       3
<PAGE>


                  common stock.  We issued 189,750 shares of its common stock in
                  satisfaction of the subscription agreements at a value of $.67
                  per share.

                  Two of our  directors,  acting  individually  as principals of
                  Taurus Investments International,  Inc. (a Nevada corporation)
                  (collectively  "Taurus"),  and as  directors  of B.G.  Banking
                  prior to its  acquisition  by the Store and  subsequent to the
                  acquisition  becoming  directors of the  Company,  offered and
                  sold on behalf of B.G.  Banking  what  Taurus has  admitted to
                  being an aggregate of 304,500 shares of B.G.  Banking's common
                  stock for an aggregate  consideration of $304,500.  Taurus has
                  remitted to the Store net  proceeds of $109,674 and claims the
                  difference   of   $194,826  as  payment   for   expenses   and
                  commissions.  In addition,  Taurus has refused to disclose the
                  names and  numbers  of shares of common  stock and  refused to
                  remit to the Store the  proceeds  of the  shares  sold.  As of
                  August 31, 2002, Taurus has failed to turn over the balance of
                  money,  provide  the  names of the stock  subscribers  and the
                  number of shares of common stock purchased.

                  Based upon the accounting provided by Taurus to the Store, the
                  Store may be liable for the  issuance of up to 329,500  shares
                  of  common  stock  if  and  when  Taurus  substantiates  their
                  representation as to the number of shares of common stock sold
                  and aggregate consideration.  This number of shares represents
                  the number of shares  admittedly  sold by Taurus for which the
                  purchases have as yet remained unidentified.

                  We may also be forced to defend ourself  against actions to be
                  brought by unknown  subscribers  to shares of common  stock of
                  B.G.  Banking whose purchase price has never been disclosed or
                  delivered to the Banker's  Store.  We are aware of one alleged
                  purchaser  who  claims to have  delivered  funds to Taurus and
                  whose  funds were  apparently  not  turned  over to us. In the
                  opinion of management,  the Banker's Store has no liability to
                  such purchasers and intends to vigorously defend such actions,
                  if and when brought.

                  We have received approximately $42,000 from Taurus relating to
                  the purchase of shares by an unknown investor in June 1999. We
                  are holding such funds in escrow pending disposition.

                  As of August 31,  2002,  we have  reserved  329,500  shares of
                  common   stock   pending   possible   issuance  of  shares  in
                  satisfaction of outstanding subscription agreements.

         Litigation:
                  On  February  29,  2000,  Alexander  C. Brosda and Andrew Seim
                  filed an action in the United States District Court in Florida
                  against the Store.  The action  alleges  that we violated  the
                  Securities and Exchange Act of 1934,



                                       4
<PAGE>


                  as amended, and various Florida statutes, by failing to affect
                  the exchange of 150,000  shares of B.G.  Banking  common stock
                  held by  Brosda  and Seim for  225,000  shares  of our  common
                  stock.  On June 5,  2000,  we filed a motion  to  dismiss  the
                  complaint  for  failure to state a claim,  improper  venue and
                  lack of jurisdiction,  respectively.  On January 23, 2001, the
                  court dismissed the plaintiff's claims alleging  violations of
                  the Securities  Exchange Act of 1934.  Plaintiffs did not file
                  an amended complaint, and the action has been dismissed by the
                  court without prejudice.

                  However,  on September 26, 2001,  Taurus Venture Capital Fund,
                  LLC and Taurus filed a similar claim against the Store and our
                  President,  Paul Clark.  The claim seeks $2,000,000 for actual
                  damages based upon a per share price of $4.50,  treble damages
                  of $6,615,000 plus interest and fees.

                  On August 6, 2002,  we filed an answer,  affirmative  defenses
                  and counterclaims against plaintiffs,  denying the allegations
                  in the complaint and alleging as counterclaims the same claims
                  as are alleged in the following  described  action  pending in
                  New York State, seeking damages in the amount of not less than
                  $1,700,000 for breach of fiduciary  duty,  breach of contract,
                  conversion and unjust enrichment, and seeking an accounting of
                  plaintiffs'  books  and  records.  We intend  to  continue  to
                  vigorously defend ourself against the claims of the plaintiffs
                  and to vigorously pursue our claims against the plaintiffs.

                  On March 7, 2000,  we filed an action in the Supreme  Court of
                  New York,  County  of New York,  against  Taurus,  seeking  an
                  amount of not less than  $1,700,000  for  breach of  fiduciary
                  duty, breach of contract, conversion and unjust enrichment and
                  seeking an accounting of Taurus' books and records. The action
                  arises out of B.G.  Banking's  confidential  private placement
                  memorandum  dated  January 31, 1998 for the sale of  3,000,000
                  shares of  common  stock at $1.00 per  share.  Taurus  filed a
                  motion to dismiss the action which the court denied on October
                  5, 2000.  On December  14,  2000,  the court  granted our oral
                  motion for the entry of a default judgment against Taurus.  On
                  May 4,  2001,  the  Court  granted  the  motion  filed  by the
                  defendant and, as a result, the action has been transferred to
                  the New York State  Supreme  Court,  Delaware  County.  We are
                  awaiting  a date for a  hearing  on  plaintiff's  damages.  We
                  intend to continue to vigorously pursue our litigation against
                  the plaintiff.

                  Although  it cannot  predict  the  outcome  of the  litigation
                  described  above, we do not believe that the ultimate  outcome
                  of the  claims  brought  by the  plaintiffs  will not have any
                  material  adverse  effects  on  our   consolidated   financial
                  statements in subsequent periods.



                                       5
<PAGE>


RESULTS OF OPERATIONS

The following table sets forth operating data as a percentage of revenue:

                                                  Three months ended
                                                      August 31,
                                                 2002            2001
                                                ----------------------

Revenue                                         100.0%          100.0%
Cost of goods sold                               55.9%           80.0%
                                                -----           -----

Gross profit                                     44.1%           20.0%

Selling, general and administrative expenses     26.4%           51.7%
                                                -----           -----

Income (loss) from operations                    17.7%          (31.7)%
Other income (expense)                            (.2)%             .1%
                                                -----           ------

Net income (loss)                                17.5%          (31.6)%
                                                =====           =====

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2002 AND 2001.

Revenue:

Revenue was approximately $710,000 for the three months ended August 31, 2002 as
compared to  approximately  $401,000  for the three months ended August 31, 2001
reflecting an increase of approximately $309,000 or 77.1%. The increase in sales
during the three months  ended August 31, 2002 was caused  primarily by the sale
of a substantial  amount of inventory to a new customer  this quarter.  Sales to
this customer approximated $410,000.

Cost of goods sold:

Cost of goods sold for the three months ended August 31, 2002 were approximately
$397,000 or 55.9% of revenue as compared to  approximately  $321,000 or 80.0% of
revenue for the three  months ended  August 31,  2001.  Gross  profit  increased
during the three  months  ended  August 31, 2002 as compared to the three months
ended August 31, 2001 primarily due to the ratio of refurbished products sold to
new products  sold.  The sale of refurbished or used items carries a much higher
gross  profit than the sales of new items.  During the year,  the  Company  sold
inventory to the new customer at a higher gross profit.  The gross profit margin
also  increased  due to a 77% increase in revenue  during the three months ended
August 31, 2002, causing a greater utilization of our fixed overhead.

Selling, general and administrative expenses:



                                       6
<PAGE>


Selling, general and administrative expenses were approximately $188,000 for the
three months ended August 31, 2002 as compared to approximately $207,000 for the
three  months  ended  August 31, 2001  reflecting  an decrease of  approximately
$19,000 or 9.2% over the same period last year.  The decrease is mainly due to a
reduction in professional fees incurred during the three months ended August 31,
2002.

Net Income (Loss):

As a result of the aforementioned,  our net income during the three months ended
August 31, 2002  increased  by  approximately  $252,000 to  approximately  a net
income of $125,000 or ($.01 per share) as opposed to a net loss of approximately
$127,000 ($.01 per share) for the comparable prior period.

As of August  31,  2002,  the  Store had net  operating  loss  carryforwards  of
approximately $230,000, the deferred asset attributable to this was offset by an
equivalent  valuation  allowance.  As a  result  there  was a  decrease  in  the
valuation  allowance  of $43,000 and an increase in the  valuation  allowance of
$51,000  during the three months  ended August 31, 2002 and 2001,  respectively,
the Company did not  recognize  any  provision or credit for income taxes in the
accompanying  condensed  consolidated  statements  of  operations  to offset its
pre-tax income and loss in those periods.


LIQUIDITY AND CAPITAL RESOURCES

We have historically  financed our operations  through revenues from operations,
private and public  placements  of equity  securities,  debt and  capital  lease
financing  and  interest  income  earned on the net  proceeds  from the  private
placements.

We had cash and cash  equivalents of $232,838 and working capital of $463,250 at
August 31, 2002. During the three months ended August 31, 2002, the Store's cash
and cash  equivalents  decreased by $16,808.  Cash and cash  equivalents used in
operations was $119,621 primarily due to the increase in accounts  receivable of
$302,478  resulting  from  higher  level of sales and a net  paydown of accounts
payable and  accrued  expenses of $55,849.  These  fluctuations  were  partially
offset by our net income of  $124,553,  the  increase  in  customer  deposits of
$73,345,  and  our net  utilization  of our  existing  inventories  of  $41,093,
respectively.  During the three months ended August 31, 2002,  we also  received
advances totaling $91,000 from our line of credit and $18,600 from our principal
stockholder.

At May 31, 2002, we had a $150,000 revolving bank line of credit with borrowings
that bore  interest  at .25% above the prime rate and were  secured  only by the
guarantee  of our  principal  stockholder.  The line of credit was  scheduled to
expire on June 12, 2002; however, during the three months ended August 31, 2002,
it was renewed and extended under the same terms until August 5, 2003.



                                       7
<PAGE>


We are  evaluating  various  alternatives  in addressing  its future  facilities
expansion needs.  The alternatives  being evaluated  include  negotiations  with
various parties for the leasing of additional facility space and the purchase of
additional  property  to  build  a new  or  additional  office  and  warehousing
facility.  Relocation to a new facility or leasing of additional  facility space
would be expected to result in an increase in rent upon occupancy.

We believe that our available cash, cash from operations and funds from existing
credit arrangements will be sufficient to satisfy our funding needs for at least
the  next  12  months.   Thereafter,   if  cash  generated  from  operations  is
insufficient   to  satisfy   our  working   capital   and  capital   expenditure
requirements, we may be required to sell additional equity or debt securities or
obtain  additional  credit  facilities.  There  can be no  assurance  that  such
additional  capital,  if needed,  will be available on satisfactory terms, if at
all.   Furthermore,   any  additional   equity  financing  may  be  dilutive  to
stockholders,   and  debt  financing,  if  available,  may  include  restrictive
covenants.  The Banker's Store future liquidity and capital funding requirements
will depend on numerous factors,  including the extent to which our new products
and  products  under  consideration  are  successfully  developed,  gain  market
acceptance  and  become  and  remain  competitive,  the  timing  and  results of
regulatory  actions  in the  banking  industry,  the costs and timing of further
expansion of sales, marketing and manufacturing activities, facilities expansion
needs.  The failure by us to raise capital on acceptable terms when needed could
have a material adverse effect on our business,  financial condition and results
of operations.



                                       8
<PAGE>


ITEM 3.       CONTROLS AND PROCEDURES

     (a) DISCLOSURE CONTROLS AND PROCEDURES. Within 90 days before filing this
report, the Company evaluated the effectiveness of the design and operation of
its disclosure controls and procedures. The Company's disclosure controls and
procedures are the controls and other procedures that it designed to ensure that
it records, processes, summarizes and reports in a timely manner the information
it must disclose in reports that it files with or submits to the Securities and
Exchange Commission. Paul D. Clark, the Company's President and CEO and Albert
Blankenship, our Principal Accounting Officer, supervised and participated in
this evaluation. Based on this evaluation, Messrs. Clark and Blankenship
concluded that, as of the date of their evaluation, the Company's disclosure
controls and procedures were effective.

     (b) INTERNAL CONTROLS. Since the date of the evaluation described above,
there have not been any significant changes in the Company's internal accounting
controls or in other factors that could significantly affect those controls.

                                    PART II.
                                OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

              No material developments occurred during the quarter with respect
              to our on-going litigation. For a discussion of this litigation,
              please see Item 2. Management's Discussion and Analysis of
              Financial Condition and Results of Operation-Litigation herein.

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3.       DEFAULTS BY THE COMPANY UPON ITS 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

              10.1  Reaffirmation of Guaranty

              10.2  Amendment to Loan Agreement and Note

              99.1  Certification of Chief Executive Officer Pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

              99.2  Certification of Chief Financial Officer Pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

         b)   Reports on Form 8-K
              None.



                                       9
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES




                                    I N D E X
                                    ---------


                                                                            PAGE
                                                                            ----
PART I -  FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

          CONDENSED CONSOLIDATED BALANCE SHEET
             AUGUST 31, 2002 (UNAUDITED)                                    F-2

          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             THREE MONTHS ENDED AUGUST 31, 2002 AND 2001 (UNAUDITED)        F-3

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             THREE MONTHS ENDED AUGUST 31, 2002 AND 2001 (UNAUDITED)        F-4

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
          (UNAUDITED)                                                      F-5-9

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

PART II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

             SIGNATURES



                                      * * *






                                       F-1
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 AUGUST 31, 2002
                                   (Unaudited)



                                     ASSETS

Current assets:
     Cash and cash equivalents                                       $  232,838
     Accounts receivable, net                                           381,984
     Inventories                                                        712,723
     Prepaid expenses and other current assets                           58,796
                                                                     ----------
              Total current assets                                    1,386,341

Equipment and improvements, net                                         101,050
Other assets                                                             25,894
                                                                     ----------

              Total                                                  $1,513,285
                                                                     ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable - bank                                            $  124,900
     Current portion of long-term debt                                   14,840
     Accounts payable and accrued expenses                              154,816
     Customer deposits                                                  231,562
     Advances from principal stockholder                                354,973
     Private placement funds in dispute                                  42,000
                                                                     ----------
              Total current liabilities                                 923,091

Long-term debt, net of current portion                                   14,618
                                                                     ----------
              Total liabilities                                         937,709
                                                                     ----------

Contingencies

Stockholders' equity:
     Common stock, $.01 par value; 80,000,000 shares
         authorized; 14,947,215 shares outstanding                      149,473
     Additional paid-in capital                                         497,216
     Accumulated deficit                                                (71,113)
                                                                     ----------
              Total stockholders' equity                                575,576
                                                                     ----------

              Total                                                  $1,513,285
                                                                     ==========




See Notes to Condensed Consolidated Financial Statements.



                                       F-2
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED AUGUST 31, 2002 AND 2001
                                   (Unaudited)





                                                        2002             2001
                                                     ---------       ----------
Revenue                                              $ 710,444       $  401,221

Cost of goods sold                                     396,825          320,922
                                                     ---------       ----------

Gross profit                                           313,619           80,299

Selling, general and administrative expenses           187,672          207,312
                                                     ---------       ----------

Income (loss) from operations                          125,947         (127,013)
                                                     ---------       ----------

Other income (expense):
    Interest income                                        196              650
    Interest expense                                    (1,590)            (509)
                                                     ---------       ----------
       Totals                                           (1,394)             141
                                                     ---------       ----------

Net income (loss)                                    $ 124,553       $ (126,872)
                                                     =========       ==========


Basic earnings (loss) per common share                    $.01            $(.01)
                                                          ====            =====


Basic weighted average number of common
   shares outstanding                               14,947,215       14,947,215
                                                    ==========       ==========








See Notes to Condensed Consolidated Financial Statements.



                                       F-3
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   THREE MONTHS ENDED AUGUST 31, 2002 AND 2001
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                               2002         2001
                                                                            ---------    ---------
<S>                                                                         <C>          <C>
Operating activities:
     Net income (loss)                                                      $ 124,553    $(126,872)
     Adjustments to reconcile net income (loss) to net cash
         provided by (used in) operating activities:
         Depreciation and amortization                                          6,903        6,288
         Changes in operating assets and liabilities:
              Accounts receivable                                            (302,478)      24,663
              Inventories                                                      41,093      (38,180)
              Prepaid expenses and other current assets                        (7,188)       2,257
              Accounts payable and accrued expenses                           (55,849)     103,145
              Customer deposits                                                73,345       64,551
                                                                            ---------    ---------
                   Net cash provided by (used in) operating activities       (119,621)      35,852
                                                                            ---------    ---------

Investing activities - capital expenditures                                   (21,256)      (3,906)
                                                                            ---------    ---------

Financing activities:
     Proceeds from notes payable - bank                                        91,000
     Principal payments on long-term debt                                      (3,769)      (3,360)
     Proceeds from long-term debt                                              18,238
     Loan payable - principal stockholder                                      18,600
                                                                            ---------    ---------
                   Net cash provided by (used in) financing activities        124,069       (3,360)
                                                                            ---------    ---------

Net increase (decrease) in cash and cash equivalents                          (16,808)      28,586
Cash and cash equivalents, beginning of period                                249,646      257,524
                                                                            ---------    ---------

Cash and cash equivalents, end of period                                    $ 232,838    $ 286,110
                                                                            =========    =========


Supplemental disclosure of cash flow information:
     Interest paid                                                          $   1,590    $     509
                                                                            =========    =========
</TABLE>




See Notes to Condensed Consolidated Financial Statements.



                                       F-4
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1 - Basis of presentation:
               In  the  opinion  of  management,   the  accompanying   unaudited
               condensed   consolidated   financial   statements   reflect   all
               adjustments,  consisting of normal recurring accruals,  necessary
               to present fairly the financial  position of The Banker's  Store,
               Inc. and Subsidiaries  (the "Company") as of August 31, 2002, and
               the Company's  results of operations and cash flows for the three
               months ended August 31, 2002 and 2001.  Pursuant to the rules and
               regulations   of  the  United  States   Securities  and  Exchange
               Commission  (the  "SEC"),  certain  information  and  disclosures
               normally included in financial  statements prepared in accordance
               with  accounting  principles  generally  accepted  in the  United
               States of America  have been  condensed  in or omitted from these
               consolidated financial statements unless significant changes have
               taken  place  since  the  end of the  most  recent  fiscal  year.
               Accordingly,  these unaudited  condensed  consolidated  financial
               statements  should  be  read  in  conjunction  with  the  audited
               consolidated  financial statements as of May 31, 2002 and for the
               years  ended  May 31,  2002 and 2001 and the notes  thereto  (the
               "Audited   Financial   Statements")  and  the  other  information
               included in the Company's Annual Report on Form 10-KSB (the "Form
               10-KSB") for the year ended May 31, 2002.

               The consolidated results of operations for the three months ended
               August 31, 2002 are not necessarily  indicative of the results to
               be expected for the full year.

               Certain  amounts  that  were  previously  reported  for the three
               months ended August 31, 2001 have been reclassified to conform to
               the current year's presentation.


Note 2 - Net income (loss) per common share:
               The Company  presents "basic" income (loss) per common share and,
               if  applicable,  "diluted"  earnings per common share pursuant to
               the provisions of Statement of Financial Accounting Standards No.
               128,  "Earnings per Share" ("SFAS 128").  Basic income (loss) per
               share  is  calculated  by  dividing  net  income  or  loss by the
               weighted average number of common shares  outstanding during each
               period. The calculation of diluted income per share is similar to
               that of basic income per share,  except that the  denominator  is
               increased to include the number of additional  common shares that
               would have been  outstanding if all  potentially  dilutive common
               shares,  such as  those  issuable  upon  the  exercise  of  stock
               options,  were issued during the period. The Company did not have
               any  potentially  dilutive common shares  outstanding  during the
               three months ended August 31, 2002 and 2001.


Note 3 - Notes payable - bank:
               At May 31, 2002,  the Company had a $150,000  revolving bank line
               of credit with  borrowings  that bore  interest at .25% above the
               prime  rate  and  were  secured  only  by  the  guarantee  of its
               principal stockholder. The line of credit was scheduled to expire
               on June 12, 2002;  however,  during the three months ended August
               31, 2002, it was renewed and extended  under the same terms until
               August 5, 2003.



                                       F-5
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 4 - Income taxes:
               As of  August  31,  2002,  the  Company  had net  operating  loss
               carryforwards  of  approximately  $230,000  available  to  reduce
               future Federal  taxable income which will expire at various dates
               through 2023.  Due to the  uncertainties  related to, among other
               things, the changes in the ownership of the Company,  which could
               subject   those  loss   carryforwards   to   substantial   annual
               limitations,  and the extent  and  timing of its  future  taxable
               income,  the Company offset the deferred tax assets  attributable
               to the  potential  benefits of  approximately  $104,000  from the
               utilization  of those net operating  loss  carryforwards  and its
               other deferred tax assets by an equivalent valuation allowance as
               of August 31, 2002.

               The  Company  had also  offset the  potential  benefits  from its
               deferred tax assets by equivalent valuation allowances during the
               year  ended  May 31,  2002.  As a result of the  decrease  in the
               valuation  allowance of $43,000 and the increase in the valuation
               allowance  of $51,000  during the three  months  ended August 31,
               2002 and 2001,  respectively,  the Company did not  recognize any
               provision  or  credit  for  income  taxes  in  the   accompanying
               condensed  consolidated  statements  of  operations to offset its
               pre-tax income and loss in those periods.


Note 5 - Contingencies:
               Private placement - B.G. Banking:
                  Prior to The Banker's Store,  Inc.'s reverse  acquisition with
                  B.G.  Banking and FBEE on May 31, 1998,  B.G.  Banking offered
                  and received  subscriptions  for 126,500  shares of its common
                  stock  at  $1.00  per  share.  Subsequent  to the  date of the
                  reverse merger,  the  subscribers to shares of B.G.  Banking's
                  common stock were offered and they  received  shares of common
                  stock in The  Banker's  Store,  Inc.  at a ratio of 1 share of
                  B.G.  Banking common stock to 1.5 shares of The Banker's Store
                  Inc.'s common stock.  The Company issued 189,750 shares of its
                  common stock in satisfaction of the subscription agreements at
                  a value of $.67 per share.

                  Two  of  the  Company's  directors,   acting  individually  as
                  principals of Taurus Investments International, Inc. (a Nevada
                  corporation) (collectively "Taurus"), and as directors of B.G.
                  Banking prior to its acquisition by The Banker's  Store,  Inc.
                  and subsequent to the  acquisition  becoming  directors of the
                  Company,  offered  and sold on  behalf  of B.G.  Banking  what
                  Taurus has admitted to being an aggregate of 304,500 shares of
                  B.G. Banking's common stock for an aggregate  consideration of
                  $304,500.  Taurus has  remitted to the Company net proceeds of
                  $109,674 and claims the  difference of $194,826 as payment for
                  expenses and commissions.  In addition,  Taurus has refused to
                  disclose  the names and numbers of shares of common  stock and
                  refused to remit to the  Company  the  proceeds  of the shares
                  sold.  As of August 31,  2002,  Taurus has failed to turn over
                  the  balance  of  money,   provide  the  names  of  the  stock
                  subscribers   and  the  number  of  shares  of  common   stock
                  purchased.



                                       F-6
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 5 - Contingencies (continued):
               Private placement - B.G. Banking (concluded):
                  Based upon the  accounting  provided by Taurus to the Company,
                  the  Company  may be liable for the  issuance of up to 329,500
                  shares of common stock if and when Taurus  substantiates their
                  representation as to the number of shares of common stock sold
                  and  the  aggregate  consideration.   This  number  of  shares
                  represents the number of shares  admittedly sold by Taurus for
                  which the purchasers have as yet remained unidentified.

                  The  Company  may also be  forced  to  defend  itself  against
                  actions  to be brought  by  unknown  subscribers  to shares of
                  common stock of B.G.  Banking whose  purchase  price has never
                  been  disclosed or  delivered  to the Company.  The Company is
                  aware of one alleged  purchaser  who claims to have  delivered
                  funds to Taurus  and whose  funds were  apparently  not turned
                  over to the Company. In the opinion of management, the Company
                  has no liability to such  purchasers and intends to vigorously
                  defend such actions, if and when brought.

                  The Company has  received  approximately  $42,000  from Taurus
                  relating to the  purchase of shares by an unknown  investor in
                  June 1999. The Company is holding such funds in escrow pending
                  disposition.

                  As of August 31, 2002, the Company has reserved 329,500 shares
                  of  common  stock  pending  possible  issuance  of  shares  in
                  satisfaction of outstanding subscription agreements.

               Litigation:
                  On  February  29,  2000,  Alexander  C. Brosda and Andrew Seim
                  filed an action in the United States District Court in Florida
                  against  the  Company.  The action  alleges  that the  Company
                  violated the Securities Exchange Act of 1934, as amended,  and
                  various Florida statutes, by failing to effect the exchange of
                  150,000 shares of B.G. Banking common stock held by Brosda and
                  Seim for 225,000 shares of the Company's common stock. On June
                  5, 2000,  the Company  filed a motion to dismiss the complaint
                  for  failure  to state a  claim,  improper  venue  and lack of
                  jurisdiction,  respectively.  On January 23,  2001,  the court
                  dismissed the plaintiffs'  claims  alleging  violations of the
                  Securities  Exchange Act of 1934.  The plaintiffs did not file
                  an amended complaint, and the action has been dismissed by the
                  court without prejudice.

                  However,  on September 26, 2001,  Taurus Venture Capital Fund,
                  LLC and Taurus filed a similar  claim  against the Company and
                  its president.  The claim seeks  $2,000,000 for actual damages
                  based  upon a per share  price of  $4.50,  treble  damages  of
                  $6,615,000  plus  interest  and fees.  On August 6, 2002,  the
                  Company  and  its  president  filed  an  answer,   affirmative
                  defenses and  counterclaims  against  plaintiffs,  denying the
                  allegations in the complaint and alleging as counterclaims the
                  same claims as are alleged in the following  described  action
                  pending in New York  State,  seeking  damages in the amount of
                  not less than $1,700,000 for breach of fiduciary duty,  breach
                  of contract,  conversion and unjust enrichment, and seeking an
                  accounting  of  plaintiffs'  books and  records.  The  Company
                  intends to continue to vigorously  defend  itself  against the
                  claims of the plaintiffs  and to vigorously  pursue its claims
                  against the plaintiffs.



                                       F-7
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 5 - Contingencies (concluded):
               Litigation (concluded):
                  On March 7, 2000,  the Company  filed an action in the Supreme
                  Court of New York, County of New York, against Taurus, seeking
                  an amount of not less than  $1,700,000 for breach of fiduciary
                  duty, breach of contract, conversion and unjust enrichment and
                  seeking an accounting of Taurus' books and records. The action
                  arises out of B.G.  Banking's  confidential  private placement
                  memorandum  dated  January 31, 1998 for the sale of  3,000,000
                  shares of  common  stock at $1.00 per  share.  Taurus  filed a
                  motion to dismiss the action which the court denied on October
                  5, 2000. On December 14, 2000, the court granted the Company's
                  oral  motion  for the  entry  of a  default  judgment  against
                  Taurus.  On May 4, 2001,  the Court  granted a motion filed by
                  the  defendant   and,  as  a  result,   the  action  has  been
                  transferred  to the New York  State  Supreme  Court,  Delaware
                  County.  The  Company is  awaiting a date for a hearing on its
                  claim against the plaintiff for damages.  The Company  intends
                  to continue to vigorously  pursue its  litigation  against the
                  plaintiff.

                  Although  it cannot  predict  the  outcome  of the  litigation
                  described above, management does not believe that the ultimate
                  outcome of the claims brought by the plaintiffs  will not have
                  any material  adverse  effects on the  Company's  consolidated
                  financial statements in subsequent periods.


Note 6 - Segment information:
               The Company has adopted the provisions of Statements of Financial
               Accounting  Standards No. 131,  "Disclosures about Segments of an
               Enterprise and Related Information ("SFAS 131").  Pursuant to the
               provisions of SFAS 131, the Company is reporting  segment  sales,
               cost of goods sold,  gross  margins and  inventories  in the same
               format  reviewed by the  Company's  management  (the  "management
               approach").  The Company  has two  reporting  segments:  "Banking
               Equipment" and "Office  Equipment." The Banking Equipment segment
               is comprised of the operations connected with the buying, selling
               and trading of new and refurbished  financial equipment for banks
               and other financial institutions. The Office Equipment segment is
               comprised of buying and selling office equipment and supplies.

               Net  sales,   cost  of  goods  sold  and  other  related  segment
               information follows for the three months ended August 31, 2002:

                     Revenue:
                         Banking Equipment                        $679,889
                         Office Equipment                           30,555
                                                                  --------

                            Total                                 $710,444
                                                                  ========



                                       F-8
<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



Note 6 - Segment information (concluded):

                     Cost of goods sold:
                         Banking Equipment                        $377,079
                         Office Equipment                           19,746
                                                                  --------

                            Total                                 $396,825
                                                                  ========

                     Gross profit:
                         Banking Equipment                        $302,810
                         Office Equipment                           10,809
                                                                  --------

                            Total                                 $313,619
                                                                  ========

               In 2001, the operations of the Office  Equipment  segment did not
               commence until the fourth quarter of the year ended May 31, 2002.



                                      * * *








                                       F-9

<PAGE>


                                   SIGNATURES

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

                                         THE BANKER'S STORE, INC.



                                     By: /s/ Paul D. Clark
                                         ---------------------------------------
                                         Paul D. Clark,
                                            President, CEO and Director
                                         (Principal Executive Officer)

                                     By: /s/ Albert Blankenship
                                         ---------------------------------------
                                         Albert Blankenship,
                                         Chief Financial Officer and Director
                                         (Principal Accounting Officer)



Date: October 21, 2002



                                  CERTIFICATION

I, Paul Clark, President and Chief Executive Officer of the Company, hereby
certify, that:

1.   I have reviewed the quarterly report on Form 10-QSB of The Banker's Store,
     Inc.;

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 in
     order 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 the report;

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

4.   he and the other certifying officers:

          i.  are responsible for establishing and maintaining "disclosure
              controls and procedures" for the issuer;


<PAGE>



         ii.  have designed such disclosure controls and procedures to ensure
              that material information is made known to them, particularly
              during the period in which the periodic report is being prepared;

        iii.  have evaluated the effectiveness of the issuer's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of the report; and

         iv.  have presented in the report their conclusions about the
              effectiveness of the disclosure controls and procedures based on
              the required evaluation as of the date;

5.       he and the other certifying officers have disclosed to the issuer's
         auditors and to the board of directors:

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

         ii.  any fraud, whether or not material, that involves management or
              other employees who have a significant role in the issuer's
              internal controls; and

6.       he and the other certifying officers have indicated in the 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 their evaluation, including any corrective
         actions with regard to significant deficiencies and material
         weaknesses.


 /s/ Paul D. Clark

Paul D. Clark
President and Chief Executive Officer

October 21, 2002



                                  CERTIFICATION

I, Albert Blankenship, Chief Financial Officer of the Company, hereby certify,
that:

1.   I have reviewed the quarterly report on Form 10-QSB of The Banker's Store,
     Inc.;

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 in
     order 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 the report;

3.   based on my knowledge, the financial statements, and other financial


<PAGE>


     information included in the report, fairly present in all material respects
     the financial condition, results of operations and cash flows of the issuer
     as of, and for, the periods presented in the report;

4.   he and the other certifying officers:


          o   are responsible for establishing and maintaining "disclosure
              controls and procedures" for the issuer;

          o   have designed such disclosure controls and procedures to ensure
              that material information is made known to them, particularly
              during the period in which the periodic report is being prepared;

          o   have evaluated the effectiveness of the issuer's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of the report; and

         iv.  have presented in the report their conclusions about the
              effectiveness of the disclosure controls and procedures based on
              the required evaluation as of the date;

5.       he and the other certifying officers have disclosed to the issuer's
         auditors and to the board of directors:

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

         ii.  any fraud, whether or not material, that involves management or
              other employees who have a significant role in the issuer's
              internal controls; and

6.       he and the other certifying officers have indicated in the 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 their evaluation, including any corrective
         actions with regard to significant deficiencies and material
         weaknesses.

 /s/ Albert Blankenship

Albert Blankenship,
Chief Financial Officer

October 21, 2002

<PAGE>
                            REAFFIRMATION OF GUARANTY

To: U.S.  BANK  N.A._________________________;----------,_________  (the "Bank")
The undersigned (the "Guarantor,"  whether one or more) has executed  Continuing
Guarant(ies)  (Unlimited),  Continuing Guarant(ies) (Limited), or Guaranties) of
Specific Transaction dated JUNE 12,  2001_________(collectively  the "GUARANTY)"
guaranteeing all of the obligations OF FINANCIAL  BUILDING  EQUIPMENT  EXCHANGE.
INC.

(the  "BORROWER)'TO  the Bank,  whether  currently  existing  or  arising in the
future.

      The Bank  will be  extending  a new  loan to the  Borrower,  or  renewing,
restructuring  or  otherwise  amending  an  existing  loan to the  Borrower,  as
evidenced by the following documents,  among others: AMENDMENT TO LOAN AGREEMENT
AND  NOTE  DATED  08/05/02,  AND ANY  RENEWALS  THEREOF  AND/OR  ANY  AMENDMENTS
thereto___________________________________________________________



PLUS ANY OBLIGATIONS ARISING UNDER COLLATERAL OR COLLATERAL DOCUMENTS SUPPORTING
THE ABOVE-REFERENCED NOTE(S) AND LOAN agreement(s) _____________________________

      The Guarantor  hereby confirms that the guaranty remains in full force and
effect,  and  the  definition  of  "Obligations"  in the  Guaranty  specifically
includes the obligations  identified above, as well as any renewals,  amendments
or refinancings  thereto  (including an increase in the principal  amount of the
loan).  Notwithstanding  the provisions of the Guaranty,  the maximum  aggregate
liability  of the  Guarantor  under the  Guaranty  shall not exceed  $150,000.00
("GUARANTIED  PRINCIPAL');  plus any and all interest accruing on the Guarantied
Principal and all fees, charges and costs of collecting the Guarantied Principal
or otherwise  enforcing the Bank's rights under the Guaranty,  including without
limitation,  reasonable  attorneys'  fees  and  expenses  (all of the  foregoing
hereafter referred to as "GUARANTIED  OBLIGATIONS!').  The Guaranty shall remain
in full force and effect until,  and shall  terminate (as "terminate" is used in
Kentucky Revised Statutes ss. 371.065, as amended) on the EARLIER of (a) the day
following  the  date  of  payment  in  full  upon  maturity  of  the  Guarantied
Obligations;  or (b) AUGUST 5, 2005; PROVIDED,  however, that the termination of
the  Guaranty  on such  termination  date  shall not  affect in any  manner  the
liability of the Guarantor with respect to (1) the Guarantied  Obligations which
are created or incurred prior to such termination date ("PRIOR OBLIGATIONS'), or
(2) extension or renewals of, interest  accruing on, or fees,  costs or expenses
incurred  with  respect  to, such Prior  Obligations  prior to, on or after such
termination date.

      The Guarantor  reaffirms  that consent by the Guarantor to any  additional
loans, refinancings,  amendments and other changes in any agreements between the
Bank and the  Borrower is not  necessary,  as  described  in the  Guaranty.  All
collateral securing the Guaranty also continues as security, and all other terms
of the Guaranty are hereby reaffirmed.

      THE GUARANTOR  REPRESENTS  THAT THE GUARANTOR HAS REVIEWED THE  BORROWER'S
FINANCIAL  CONDITION  PRIOR TO EXECUTING THIS  REAFFIRMATION;  AND THE GUARANTOR
SPECIFICALLY  RELIEVES THE BANK OF ANY OBLIGATION TO ADVISE THE GUARANTOR OF THE
BORROWER'S  CURRENT  FINANCIAL  CONDITION,  OR ANY  CHANGES  IN  THE  BORROWER'S
FINANCIAL CONDITION IN THE FUTURE.

THE GUARANTOR HEREBY  ACKNOWLEDGES THE RECEIPT OF A COPY OF THIS  REAFFIRMATION.
IMPORTANT:  READ  BEFORE  SIGNING.  THE TERMS OF THIS  AGREEMENT  SHOULD BE READ
CAREFULLY  BECAUSE  ONLY THOSE TERMS IN WRITING,  EXPRESSING  CONSIDERATION  AND
SIGNED BY THE  PARTIES ARE  ENFORCEABLE.  NO OTHER  TERMS OR ORAL  PROMISES  NOT
CONTAINED IN THIS WRITTEN  CONTRACT  MAY BE  LEGALLYENFORCED.  THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED BY ANOTHER  WRITTEN  AGREEMENT.  THIS NOTICE SHALL
ALSO BE  EFFECTIVE  WITH RESPECT TO ALL OTHER  CREDIT  AGREEMENTS  NOW IN EFFECT
BETWEEN  GUARANTOR AND THE BANK. A MODIFICATION  OF ANY OTHER CREDIT  AGREEMENTS
NOW IN EFFECT  BETWEEN  GUARANTOR  AND THE BANK,  WHICH OCCURS AFTER  RECEIPT BY
GUARANTOR OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN  INSTRUMENT.  ORAL
OR IMPLIED  MODIFICATIONS  TO SUCH CREDIT  AGREEMENTS  ARE NOT  ENFORCEABLE  AND
SHOULD NOT BE RELIED UPON.

      ALL  DOCUMENTS  ATTACHED  HERETO,  INCLUDING  ANY  APPENDICES,  SCHEDULES,
RIDERS,  AND EXHIBITS TO THIS  REAFFIRMATION  OF GUARANTY,  ARE HEREBY EXPRESSLY
INCORPORATED BY REFERENCE.

Dated as of:  AUGUST 5, 2002                               N/A
(Individual Guarantor)                         Guarantor Name (Organization)

                                 - (SEAL)   a.


GUARANTOR NAME PAUL D CLARK                 BY:.
                                            Name and Title: __________N/A

                                 - (SEAL) By:.
Guarantor Name ____________________         Name and Title: __________N/A


<PAGE>


                                       FOR BANK USE ONLY Reviewed by
                                       Due AUGUST 5, 2003
                                       Customer #5333808 Loan # 0101

                      AMENDMENT TO LOAN AGREEMENT AND NOTE

         This amendment (the "AMENDMENT",  dated as of the date specified below,
is by and  between  the  borrower  (the  "BORROWER";  and the bank (the  "BANK")
identified below.

                                    RECITALS

      A.  The  Borrower  and  the  Bank  have  executed  a Loan  Agreement  (the
"AGREEMENT')  dated  JUNE 12.  2001 and the  Borrower  has  executed a Note (the
"Note"),  dated JUNE 12. 2001 , either or both which may have been  amended from
time to time, and the Borrower (and if  applicable,  certain third parties) have
executed the  collateral  documents  which may or may not be  identified  in the
Agreement  and  certain  other  related   documents   (collectively   the  "LOAN
DOCUMENTS"),  setting forth the terms and conditions upon which the Borrower may
obtain  loans  from  the  Bank  from  time  to time in the  original  amount  of
$150.000.00, as may be amended from time to time.

      B. The Borrower has requested that the Bank permit  certain  modifications
to the  Agreement  and Note as described  below.  C. The

      Bank has  agreed  to such  modifications,  but only  upon  the  terms  and
conditions outlined in this Amendment.


                               TERMS OF AGREEMENT

          In  consideration of the mutual covenants  contained  herein,  and for
other  good and  valuable  consideration,  the  Borrower  and the Bank  agree as
follows:

      X Extension of Maturity  Date.  If checked  here,  any  references  in the
Agreement  or Note to the  maturity  date or date of final  payment  are  hereby
deleted and replaced with " AUGUST 5. 2003".


      __ CHANGE IN MAXIMUM LOAN AMOUNT.  If checked here,  all references in the
Agreement  and in the Note  (whether or not  numerically)  to the  maximum  loan
amount are hereby  deleted and  replaced  with "$  ________N/A_________",  which
evidences an additional $  ____N/A_________  available to be advanced subject to
the terms and conditions of the Agreement and Note.

      __ CHANGE IN MULTIPLE  ADVANCE  TERMINATION  DATE.  If checked  here,  all
references in the Agreement and in the Note to the termination date for multiple
advances are hereby deleted and replaced with " _______N/A________"_

      CHANGE IN FINANCIAL COVENANT(S).

          (i) __ If checked  here,  all  references  to  "$____________"  in the
          Agreement as the minimum Net Working Capital amount are hereby deleted
          and  replaced  with  "$   ____________"   for  the  period   beginning
          _______________and thereafter.

          (ii) __ If checked here,  all  references to "$  ____________"  in the
          Agreement as the minimum  Tangible Net Worth amount are hereby deleted
          and  replaced  with  "$  ____________  "  for  the  period   beginning
          _______________ and thereafter.

          (iii) __ If checked  here,  all  references to  "____________"  in the
          Agreement  as the maximum  Debt to Worth Ratio are hereby  deleted and
          replaced    with    "____________"    FOR   the    period    beginning
          _______________and thereafter.

          (iv) __ If checked  here,  all  references to "  ____________"  in the
          Agreement as the minimum Current Ratio are hereby deleted and replaced
          with "  ____________"  for  the  period  beginning  _______________and
          thereafter.

          (v)__ D If checked here,  all  references to  "$____________  " in the
          Agreement  as the  maximum  Capital  Expenditures  amount  are  hereby
          deleted and  replaced  with  "$____________"for  the period  beginning
          _______________and thereafter.

          (vi) __ If checked here,  all  references to "  ____________  " in the
          Agreement as the minimum Cash Flow Coverage  Ratio are hereby  deleted
          and  replaced   with  "   ____________"   for  the  period   beginning
          _______________and thereafter.

          (vii) __ It checked here,  all references to  "$____________  " in the
          Agreement as the maximum Officers, Directors, Partners, and Management
          Salaries and Other Compensation amount are hereby deleted and replaced
          with  "$____________"  for the period  beginning  _______________  and
          thereafter.

          __ CHANGE IN PAYMENT  SCHEDULE.  If checked here,  effective  upon the
date of this Amendment, any payment terms are amended as follows:

<PAGE>


         Q Change in Late Payment Fee. If checked  here,  subject to  applicable
law, if any payment is not made on or before its due date,  the Bank may collect
a  delinquency  charge of _____% of the unpaid  amount.  Collection  of the late
payment fee shall not be deemed to be a waiver of the Bank's  right to declare a
default hereunder.

         DEFAULT  INTEREST RATE.  Notwithstanding  any provision of this Note to
the contrary,  upon any default or at any time during the  continuation  thereof
(including  failure  to pay upon  maturity),  the Bank may,  at its  option  and
subject to applicable law,  increase the interest rate on this Note to a rate of
5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding
the foregoing and subject to applicable law, upon the occurrence of a default by
the Borrower or any guarantor  involving  bankruptcy,  insolvency,  receivership
proceedings or an assignment for the benefit of creditors,  the interest rate on
this Note shall  automatically  increase to a rate of 5% per annum plus the rate
otherwise payable hereunder.

         EFFECTIVENESS  OF  PRIOR  DOCUMENTS.  Except  as  specifically  amended
hereby,  the Agreement,  the Note and the other Loan  Documents  shall remain in
full force and effect in accordance with their respective  terms. All warranties
and representations  contained in the Agreement and the other Loan Documents are
hereby reconfirmed as of the date hereof. All collateral  previously provided to
secure the  Agreement  and/or Note  continues  as security,  and all  guaranties
guaranteeing  obligations  under the Loan  Documents  remain  in full  force and
effect. This is an amendment, not a novation.

         PRECONDITIONS  TO  EFFECTIVENESS.  This  Amendment  shall  only  become
effective upon execution by the Borrower and the Bank, and approval by any other
third party required by the Bank.

         NO  WAIVER  OF  DEFAULTS;  WARRANTIES.  This  Amendment  shall  not  be
construed as or be deemed to be a waiver by the Bank of existing defaults by the
Borrower,  whether known or undiscovered.  All agreements,  representations  and
warranties made herein shall survive the execution of this Amendment.

         COUNTERPARTS.   This   Amendment  may  be  signed  in  any   number  of
counterparts,  each of which shall be  considered  an  original,  but when taken
together shall constitute one document.

         AUTHORIZATION. The Borrower represents and warrants that the execution,
delivery and performance of this Amendment and the documents  referenced  herein
are within the  authority of the Borrower and have been duly  authorized  by all
necessary action.

         ATTACHMENTS.   ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES,
SCHEDULES,  RIDERS,  AND  EXHIBITS  TO  THIS  AMENDMENT,  ARE  HEREBY  EXPRESSLY
INCORPORATED HEREIN BY REFERENCE.


Dated as of:  AUGUST 5. 2002_______,______.
FINANCIAL BUILDING EQUIPMENT EXCHANGE, INC. (individual Borrower)


                                           A KENTUCKY CORPORATION
                                           -------------------------------------


                                           By:__________________________________
Borrower Name ____________N/A

                                           Name and Title: PAUL CLARK. PRESIDENT

                                           BY:

Borrower Name____________N/A_________      Name and Title:





Agreed to:

  U.S.BANK N.A.
  -------------
By:
    JOHN LEE Name and Title:
     COMMERCIAL LENDER