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, 2004

                                       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 17,
2004.

<PAGE>
                            THE BANKER'S STORE, INC.

                                   FORM 10-QSB

                                 AUGUST 31, 2004


                                      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
            PLAN OF OPERATION



The matters discussed in this management's discussion and analysis or plan of
operations contain forward-looking statements that involve risks and
uncertainties. The Company's actual results in our two operating segments could
differ materially from those discussed here. Factors that could cause or
contribute to such differences are discussed elsewhere in this quarterly 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, refurbishing and
trading new and refurbished financial equipment for banks and other financial
institutions. Commencing during the fourth quarter of the year ended May 31,
2002, 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.


                                       2
<PAGE>

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

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

Significant accounting 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 from
these estimates under different assumptions or conditions. The accounting
estimates used as of May 31, 2004 and as outlined in our previously filed Form
10-KSB have been applied consistently for the three months ended August 31,
2004.

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. This lease has been recently renewed
to 2007 on substantially the same terms.

On September 20, 2002, Paul Clark purchased an additional building located at
370 Cal Batsel Road, Bowling Green, Kentucky for $225,000. It primarily consists
of a showroom and is being leased from him under a month to month lease for
$2,200 per month, plus taxes and maintenance expenses, pursuant to a lease that
has also recently been extended to 2007.

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 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


                                       3
<PAGE>

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, 2004, 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 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 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, 2004, 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, 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. 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 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. In November 2001, the
Company and its president filed a motion to discuss or abate the action and are
awaiting the scheduling by the court of a hearing on the motion. On May 30,
2002, the court issued a decision denying the motion to dismiss.


                                       4
<PAGE>

On August 6, 2002, the Company and the 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 believes that they have meritorious
defenses and intends to vigorously defend the action. On May 28, 2003, the
Company and its president filed a motion to dismiss the action and are awaiting
the scheduling by the court of a hearing on the motion.

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 November 15, 2000 a motion filed by Taurus counsel to be relieved as counsel
was granted. 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. The Company is
awaiting a date for a hearing on its claim against the plaintiff for damages.
The parties are scheduled to begin taking depositions in the case on October 26,
2004. The Company intends to continue to litigate this action.

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

RESULTS OF OPERATIONS

The following table sets forth operating data as a percentage of revenue for the
three months ended August 31, 2004:



                                                   Three months ended
                                                       August 31,
                                                   2004           2003
                                                -------------------------

Revenue                                           100.0%         100.0%
Cost of goods sold                                 75.2%          80.5%
                                                  -----          -----

Gross profit                                       24.8%          19.5%

Selling, general and
administrative expenses                            26.1%          20.4%
                                                  -----          -----

Loss from operations                               (1.3)%          (.9)%
Other income (expense)                              (.1)%           .2%
                                                  -----          -----

Net loss                                           (1.4)%          (.7)%
                                                  =====          =====


                                       5
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2004 AS COMPARED TO
THE THREE MONTHS ENDED AUGUST 31, 2003.

Revenues were approximately $652,400 for the three months ended August 31, 2004
as compared to approximately $705,900 for the three months ended August 31, 2003
reflecting a decrease of approximately $53,500 or 7.6%. The decrease in revenues
during the three months ended August 31, 2004 was caused primarily by decrease
in revenue from our Banking equipment segment by approximately $29,700 or 5%.
This decrease in sales during the three months ended August 31, 2004 was caused
primarily by the low interest rate environment which has negatively impacted the
earnings of financial institutions. Therefore, financial institutions have
reduced their spending on new construction and are focusing instead on small
remodeling projects, upgrading of ATMs, drive up systems and other new
technologies. This trend by the financial institution will probably continue for
the next quarter.

Cost of goods sold and related expenses for the three months ended August 31,
2004 were approximately $491,000 or 75.2% of net sales as compared to
approximately $568,000 or 80.5% of net sales for the three months ended August
31, 2003. Gross profit increased during the three months ended August 31, 2004
as compared to the three months ended August 31, 2003 primarily due to the ratio
of refurbished products sold to new products sold. During this quarter we sold
more refurbished products which carry a higher gross profit percentage.

Selling, general and administrative expenses were approximately $170,200 for the
three months ended August 31, 2004 as compared to approximately $143,600 for the
three months ended August 31, 2003 reflecting an increase of approximately
$26,600 or 19% over the same period last year. The increase is mainly due to
general professional fees incurred relating to the litigation during the period.

As a result of the aforementioned, the Company incurred a net loss during the
three months ended August 31, 2004 of approximately $8,900 as opposed to a net
loss of approximately $4,600 for the comparable prior period.

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.


                                       6
<PAGE>

We had cash and cash equivalents of $288,713 and working capital of $380,171 at
August 31, 2004. During the three months ended August 31, 2004, our cash and
cash equivalents increased by $6,300. Cash and cash equivalents generated from
operations was $6,900 primarily due to a increase in accounts payable and
accrued expenses of $114,000. This increase was used to increase inventory by
$134,242 in anticipation of future sales and an decrease in accounts receivable
of $96,892 resulting from a lower level of sales during the last month of the
period. During the three months ended August 31, 2004, we also received net cash
advances of $5,850 from our principal stockholder. We used part of these
proceeds to purchase $2,449 of equipment and make principal payments on long
term debt of $4,061.

We are evaluating various alternatives in addressing our 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 through at least
August 31, 2005. 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. Our 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 and 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.

ITEM 3. CONTROLS AND PROCEDURES

(a) DISCLOSURE CONTROLS AND PROCEDURES. As of August 31, 2004, 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, CEO and CFO, supervised and
participated in this evaluation. Based on this evaluation, Mr. Clark concluded
that, as of the date of their evaluation, the Company's disclosure controls and
procedures were effective.


                                       7
<PAGE>

(b) CHANGES IN INTERNAL CONTROLS. There were no changes in internal controls
over financial reporting known to the Chief Executive Officer and Chief
Financial Officer that occurred during the period covered by this report that
has materially affected , or is likely to materially effect, the Company's
internal control over financial reporting.

                                    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

31.1 Certification Pursuant to Rule 13a-14(a) of Paul Clark
32.1 Certification of Paul Clark


                                       8
<PAGE>

                              FINANCIAL STATEMENTS

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                                    I N D E X

                                      PAGE

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
                                                                         PAGE

         CONDENSED CONSOLIDATED BALANCE SHEET
                   AUGUST 31, 2004 (UNAUDITED)                            F-2

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             THREE MONTHS ENDED AUGUST 31, 2004 AND 2003 (UNAUDITED)      F-3

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             THREE MONTHS ENDED AUGUST 31, 2004 AND 2003 (UNAUDITED)      F-4

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
             (UNAUDITED)                                               F-5 - F-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, 2004
                                   (Unaudited)

                                     ASSETS



Current assets:
     Cash and cash equivalents                                       $  288,713
     Accounts receivable, net                                           173,422
     Inventories                                                        753,589
     Prepaid expenses and other current assets                           42,912
                                                                     ----------
              Total current assets                                    1,258,636

Equipment and improvements, net                                          78,139
Other assets                                                              7,332
                                                                     ----------

              Total                                                  $1,344,107
                                                                     ==========



                      LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:
     Current portion of long-term debt                               $   13,333
     Accounts payable and accrued expenses                              223,689
     Customer deposits                                                  178,002
     Advances from principal stockholder                                421,441
     Private placement funds in dispute                                  42,000
                                                                     ----------
              Total current liabilities                                 878,465

Long-term debt, net of current portion                                    4,272
                                                                     ----------
              Total liabilities                                         882,737
                                                                     ----------

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                                               (185,319)
                                                                     ----------
              Total stockholders' equity                                461,370
                                                                     ----------

              Total                                                  $1,344,107
                                                                     ==========



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, 2004 AND 2003
                                   (Unaudited)



                                                        2004             2003
                                                      --------         --------
Revenue                                               $652,394         $705,896

Cost of goods sold                                     490,835          567,954
                                                      --------         --------

Gross profit                                           161,559          137,942

Selling, general and administrative expenses           170,243          143,656
                                                      --------         --------

Loss from operations                                    (8,684)          (5,714)
                                                      --------         --------

Other income (expense):
    Interest and other income                              104           1,644
    Interest expense                                      (368)           (549)
                                                      --------         --------
       Totals                                             (264)           1,095
                                                      --------         --------

Net loss                                              $ (8,948)        $ (4,619)
                                                      ========         ========

Basic loss per common share                           $   ( - )        $   ( - )
                                                      ========         ========

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, 2004 AND 2003
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                     2004            2003
                                                                                  ----------      ----------
<S>                                                                               <C>               <C>
Operating activities:
     Net loss                                                                     $   (8,948)       $ (4,619)
     Adjustments to reconcile net loss to net cash
         provided by operating activities:
         Depreciation and amortization                                                 7,383           8,048
         Changes in operating assets and liabilities:
              Accounts receivable                                                     96,892         (39,807)
              Inventories                                                           (134,242)        (55,235)
              Prepaid expenses and other current assets                                7,532           6,939
              Other assets                                                                            (1,000)
              Accounts payable and accrued expenses                                  114,078          41,733
              Customer deposits                                                      (75,765)         77,616
                                                                                  ----------      ----------
                      Net cash provided by operating activities                        6,930          33,675
                                                                                  ----------       ---------

Investing activities - capital expenditures                                           (2,449)        (15,247)
                                                                                  ----------      ----------

Financing activities:

     Principal payments on long-term debt                                             (4,061)         (2,363)
     Loan payable - principal stockholder                                              5,850           6,600
                                                                                  ----------      ----------
                      Net cash provided by financing activities                        1,789           4,237
                                                                                  ----------      ----------

Net increase in cash and cash equivalents                                              6,270          22,665
Cash and cash equivalents, beginning of period                                       282,443         239,744
                                                                                  ----------      ----------

Cash and cash equivalents, end of period                                          $  288,713      $  262,409
                                                                                  ==========      ==========


Supplemental disclosure of cash flow information:
     Interest paid                                                                $      368      $      549
                                                                                  ==========      ==========
</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, 2004, and the
Company's results of operations and cash flows for the three months ended August
31, 2004 and 2003. 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, 2004 and for the years ended May 31, 2004 and 2003 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, 2004.

The consolidated results of operations for the three months ended August 31,
2004 are not necessarily indicative of the results to be expected for the full
year.

NOTE 2 - EARNINGS (LOSS) PER COMMON SHARE:

The Company presents "basic" earnings (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 earnings (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 earnings per share is similar to that of
basic earnings 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 at August 31, 2004 or 2003.

NOTE 3 - INCOME TAXES:

As of August 31, 2004, the Company had net operating loss carryforwards of
approximately $71,000 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 $126,000 from
the utilization of those net operating loss carryforwards and its other deferred
tax assets by an equivalent valuation allowance as of August 31, 2004.


                                      F-5
<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 3 - INCOME TAXES (CONCLUDED):

The Company had also offset the potential benefits from its deferred tax assets
by equivalent valuation allowances during the year ended May 31, 2004. As a
result of the decrease in the valuation allowance of $1,000 and the increase in
the valuation allowance of $3,000 during the three months ended August 31, 2004
and 2003, respectively, the Company did not recognize any income taxes in the
accompanying condensed consolidated statements of operations to offset its
pre-tax income and loss in those periods.

NOTE 4 - 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, 2004, 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 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.


                                      F-6
<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 4 - CONTINGENCIES (CONTINUED):

Private placement - B.G. Banking (concluded):

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, 2004, 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. In November 2001, the Company and
its president filed a motion to dismiss or abate the action and are awaiting the
scheduling by the court of a hearing on the motion. On May 30, 2002, the court
issued a decision denying the motion to dismiss.

On August 6, 2002, the Company and the 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 of unjust enrichment, and seeking an accounting of
plaintiff's books and records. The Company believes that they have meritorious
defenses and intends to vigorously defend the action. On May 28, 2003, the
Company and its president filed a motion to dismiss the action and are awaiting
the scheduling by the court of a hearing on the motion.


                                      F-7
<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 4 - 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 November 15, 2000, a motion filed by Taurus' counsel to be
relieved as counsel was granted. 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 parties are scheduled to begin taking depositions on
October 26, 2004. The Company intends to continue to litigate this action.

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 5 - 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.

Revenue, cost of goods sold and other related segment information follows as of
August 31, 2004 and for the three months ended August 31, 2004 and 2003:


                                      F-8
<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 5 - SEGMENT INFORMATION (CONCLUDED):



                                       August           August
                                      31, 2004         31, 2003
                                     ----------      -----------

Revenue:
    Banking Equipment                $  584,491      $   614,171
    Office Equipment                     67,903           91,725
                                     ----------      -----------

          Totals                     $  652,394      $   705,896
                                     ==========      ===========

Cost of goods sold:
    Banking Equipment                $  434,513      $   506,838
    Office Equipment                     56,322           61,116
                                     ----------      -----------

          Totals                     $  490,835      $   567,954
                                     ==========      ===========

Gross profit:
    Banking Equipment                $  149,978      $   107,333
    Office Equipment                     11,581           30,609
                                     ----------      -----------

          Totals                     $  161,559      $   137,942
                                     ==========      ===========



Segment assets:
    Inventories:
       Banking Equipment             $  739,064
       Office Equipment                  14,525
                                     ----------
          Totals                        753,589

    Other assets                        590,518
                                     ----------

          Total assets               $1,344,107
                                     ==========



                                      * * *


                                      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, CHIEF FINANCIAL OFFICER, AND DIRECTOR

                          (Principal Executive Officer)


Date: October 20, 2004