UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------
                                   FORM 10-KSB
                     ANNUAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the Fiscal Year Ended May 31, 2004
                           COMMISSION FILE NO.: 0-8880

                            THE BANKER'S STORE, INC.

                    (Exact Name of Registrant in its Charter)



NEW YORK                                                   11-2196303
(State or Other Jurisdiction                               (I.R.S. Employer
Of Incorporation or Organization)                          Identification No.)


               1535 Memphis Junction Road, Bowling Green, KY 42101
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

       Registrant's Telephone Number, Including Area Code: (270) 781-8453

        Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of Act: Common Stock,
                            par value $.01 per share.


Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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. [X] Yes [ ] No.

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained herein, and will not be contained, to the best of
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

For the fiscal year ended May 31, 2004, the issuer's revenues were $2,465,924.

As of August 27, 2004, the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the Registrant was approximately
$108,663. This aggregate market value is computed by reference to the last sale
price of such common equity on such date. As of August 27, 2004, the Registrant
had 14,947,215 shares of common stock outstanding.



<PAGE>


ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

The Banker's Store, Inc., was incorporated under the laws of the State of New
York, on June 26, 1968, in the name of Inter-County Premium Advancing Corp. The
corporate name was changed to Delhi Chemicals in 1976, Delhi Consolidated
Industries, Inc. in 1981, Maritime Transport and Technology, Inc. in 1987, and
to the present name on July 13, 2000. During the period from June, 1968 through
May, 1998, we acquired and/or began to develop, and disposed of, several
different businesses. In May, 1998, our company, which had no significant
assets, liabilities, or operations at the time, completed the reverse
acquisition of B.G. Banking Equipment, Inc., and Financial Building Equipment
Exchange, Inc., which were two affiliated companies that had common ownership.

In connection with this acquisition, we issued 11,282,250 shares of our common
stock in exchange for all of the shares of the acquired companies. As a result
of the exchange, the former stockholders of the acquired companies owned
approximately 75% of the post-acquisition entity, and our former stockholders
owned approximately 25% of the post-acquisition entity. The acquisition was
treated as a purchase business combination and a reverse acquisition for
accounting purposes, in which we were the legal acquirer and the acquired
companies were the accounting acquirer; the assets and liabilities of the
acquired companies were recorded at their historical carrying values as of June
1, 1998, and our historical financial statements prior to June 1, 1998 are those
of the acquired companies.

OUR BUSINESS

PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKETS.

Our principal products and services are bank-related equipment, remote drive-up
and walk-up teller systems, automated teller machines (ATMs), vaults, safe
deposit boxes, safes, filing systems and counter lines. In addition to
traditional bank locations, we have added pharmacies and super drug stores,
utilities, shipping departments in factories and hospitals to our customer base
with drive-up and walk-up pneumatic and belt driven money transport and
transaction systems. In addition, we provide all types of physical security
systems including access control, master key systems and electronic locks,
closed circuit television, and security systems to our customers.

In June of 2001, we entered into the office equipment and furniture retail
business, selling to commercial and industrial customers. All of our equipment
sold is new, or pre-owned and refurbished in our shops. We receive much of our
products directly from existing customers, through asset managers of bank
holding companies, web advertising, and a large independent bank equipment
dealer network.

Our primary geographic markets are Kentucky, Tennessee and surrounding states.
We install our own products and also service the products we sell. The Internet
has increased awareness of our products and has been a good resource for
purchasing as well as sales. Our primary customer market has been community
banks, newly established banks and credit unions.

DISTRIBUTION METHODS OF PRODUCTS AND SERVICES.

Sales of equipment are made directly to customers by our sales personnel, as
well as representatives from related companies, and direct support from several
manufacturers and distributors. The technical nature of our products requires
direct contact with customers and their architects and building contractors.
Most products are sold under contractual agreements on total price, terms and
conditions when installation by us is required. Purchase agreements are required
from customers who provide for their own installations. We currently employ two
outside sales representatives who operate in Kentucky, Tennessee and bordering
states and two in house sales representatives who service customers over the
telephone and internet and on a walk-in basis.

COMPETITIVE CONDITIONS.

We know of other entities presently competing for the same geographic and
business markets. Some of the other entities, such as Diebold, have greater
capital resources, better geographic presence, national marketing, and more
experience than we have. Other entities cover similar markets but sell different
manufacturers' products as a dealership, and are not quite as diversified in
terms of product mix. We have an advantage in some areas in that our pre-owned,
in-house refurbished steel products and warehousing, transport and installation
capability give us a

                                       1
<PAGE>

pricing advantage on many of the products required by banks. Many of these
products seldom change in style and can be resold for less than they cost to
manufacture new. We also compete by allowing customer trade-in, consignment, or
repurchasing of our customers' excess equipment.

We have not yet completed our showroom, but when and if it is complete, we
expect it to give us a showplace for the latest equipment in the industry. The
showroom will allow our customers to compare products from manufacturers we
represent and products our competitors represent. Our customers will be able to
bring floor plans and we can provide brochures, schematics and layouts with
complete specifications as well as pricing on all our products, including office
furniture. Until we complete the showroom, prospective customers will have to
visit our previous installation sites in order to view our products. We
currently use the showroom space for showcasing furniture, demonstrating
drive-up systems and overflow warehousing.

From time to time, we cooperate with competitors which, like us, are independent
suppliers of banking equipment in fulfilling large orders or supplying each
other with pieces of equipment which may otherwise be more difficult to locate.

SOURCES AND AVAILABILITY OF PRODUCTS AND PRINCIPAL SUPPLIERS.

Because of a large number of mergers in the past decade among banks, closing
many branches, we have been able to stockpile large quantities of equipment for
resale. This includes safes and vaults, vault panels, depositories, bullet
resistant glass, and teller fixtures. We do not believe that a shortage of our
products is likely. Because part of this business requires that we match an
existing product's specifications, size, color, etc. of teller fixtures, safe
deposit boxes, ATMs. We buy from several manufactures for each product we sell.
We can usually match our competitors' equipment for quality and price, with new
or pre-owned products purchased directly from manufacturers, distributors and
specialty equipment brokers.

SIGNIFICANT CUSTOMERS.

Our core market has been the community banks and credit unions of usually ten
branches or less. We had no customers in 2004 which accounted for more than 10%
of our revenues.

INTELLECTUAL PROPERTY.

None.

NEED FOR ANY GOVERNMENTAL APPROVAL FOR PRODUCTS OR SERVICES.

None.

EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS.

None.

DESCRIPTION OF RESEARCH AND DEVELOPMENT ACTIVITIES OVER LAST TWO YEARS.

None.

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS.

None.

EMPLOYEES

As of August 30, 2004, we employed 18 full-time employees. Paul Clark serves as
our President, and Roberta Clark as our corporate Secretary. We have four
persons employed in sales (one of whom sells office equipment on a commission
only basis), three persons in administrative capacities and one clerical worker.
We also have four persons engaged in installation, and six in service
activities, in the field.

                                       2
<PAGE>


ITEM 2. DESCRIPTION OF PROPERTY

We currently occupy approximately 32,000 square feet of office, warehouse,
showroom and shop space which we lease from our President and CEO, Paul Clark
pursuant to two separate leases. We pay a monthly rental of $5,000, plus
applicable real estate taxes and maintenance expenses, for 23,976 square feet of
office and warehouse space, which is located at 1535 Memphis Junction Road,
Bowling Green, Kentucky, pursuant to a three year lease agreement dated August
1, 1998, between Paul D. Clark, our President, and the Company. This lease has
been recently renewed to 2007 on substantially the same terms. We pay $2,200 per
month, plus taxes and maintenance expenses, for the remainder of the space,
primarily consisting of a showroom located at 370 Cal Batsel Road, Bowling
Green, Kentucky, pursuant to a lease that has also recently been extended to
2007.

ITEM 3. LEGAL PROCEEDINGS

On March 7, 2000, we filed an action in the Supreme Court of the State of New
York, County of New York, against Stamford Financial Consulting, Inc., Taurus
International Investment, Inc., George C. Bergleitner, Jr., Alexander C. Brosda
and Andrew Seim, seeking an amount of not less than $1.7 million for breach of
fiduciary duty, breach of contract, conversion and unjust enrichment, and
seeking an accounting of defendants' books and records. The action arises out of
B.G. Banking's Confidential Private Placement Memorandum dated January 31, 1998,
prepared by Stamford Financial, for the sale of 3,000,000 shares of B.G. Banking
common stock at $1.00 per share. On April 5, 2000, defendant George C.
Bergleitner served a counterclaim alleging that we failed to have 180,000 shares
of our stock transferred without any legal endorsement, pursuant to Rule 144(k)
under the Securities Exchange Act of 1934, as amended. The counterclaim seeks
damages of $900,000 based upon the value of the stock at the highest amount at
which it traded, which is alleged to be $5.00 per share. We believe we have
meritorious defenses to the counterclaim and are defending the counterclaim with
vigor.

Defendants Taurus, Brosda and Seim filed a motion to dismiss the action, which
the court denied on October 5, 2000. On November 15, 2000, a motion filed by
counsel for Taurus, Brosda and Seim, 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 International Investment, Inc., Alexander C.
Brosda and Andrew Seim. We are now awaiting a date for a hearing on damages.

By order entered on May 4, 2001, granting a motion filed by the other defendants
in the matter, namely Stamford Financial Consulting, Inc. and George C.
Bergleitner, the action has been transferred to New York State Supreme Court,
Delaware County, and the action is continuing there against these defendants.

On September 26, 2001, we were named as a defendant (under the names The
Bankstore, Inc. and B.G. Banking Equipment, Inc.) in an action filed in the
Circuit Court of the Twelfth Judicial District, Manatee County, Florida by
Taurus Venture Capital Fund, LLC and Taurus International Investments, Inc. Our
president, Paul D. Clark ("Clark"),was also named as a defendant. The action
alleges that The Banker's Store and Mr. Clark violated various Florida statutes,
by failing to effect the exchange of 150,000 shares of B.G. Banking common stock
held by Alexander Brosda and Andrew Seim (allegedly as the beneficial owners for
plaintiffs), for 225,000 shares of the common stock of the The Banker's Store.
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, we
filed a motion with Mr. Clark to dismiss the action on jurisdictional grounds.
On May 30, 2002, the court issued a decision denying the motion to dismiss.

On August 6, 2002, we, together with Mr. Clark, 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
above described action pending in New York State, seeking damages in an amount
of not less than $1.7 million for breach of fiduciary duty, breach of contract,
conversion and unjust enrichment, and seeking an accounting of plaintiffs' books
and records. Mr. Clark and we believe that we have meritorious defenses and
intend to defend the action vigorously.

On May 28, 2003, the Company and Clark filed a motion for summary judgment
dismissing the complaint. Plaintiffs have not yet responded to the motion and
the Company and Clark are waiting for the court to schedule a hearing on the
motion.

                                       3
<PAGE>


ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

No matters were submitted, during the fourth quarter of the fiscal year covered
by this report, to a vote of security holders, through the solicitation of
proxies or otherwise.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION.

The principal market on which our Common Stock is traded is the OTC Bulletin
Board. Our ticker symbol is BSTR.

The following table sets forth the high and low bid information for our Common
Stock for each quarter, since August 31, 2002. This information was received
from the OTC Bulletin Board. As these are over-the-counter market quotations,
they reflect inter-dealer prices, without retail markup, markdown, or
commissions, and may not represent actual transactions.



                                                         High:           Low:

For the quarter ended:      August 31, 2002             $0.15           $0.08
                            November 30, 2002            0.21            0.06
                            February 28, 2003            0.16            0.07
                            May 31, 2003                 0.15            0.07
                            August 31, 2003              0.11            0.05
                            November 30, 2003            0.17            0.05
                            February 28, 2004            0.11            0.10
                            May 31, 2004                 0.05            0.05


HOLDERS OF OUR SECURITIES.

The approximate number of holders of record of our common Stock, as of August
30, 2004, was 907. This information was obtained from Continental Stock Transfer
& Trust Company, our transfer agent. We did not issue any Common Stock during
the fiscal year ended May 31, 2004.


DIVIDENDS.

No dividends have been paid on our Common Stock; we do not foresee paying any
dividends on our stock in the near future.

                                       4
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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. Our actual results in our two segments 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-KSB. We disclaim any intent or obligation to update these
forward-looking statements.

OVERVIEW

The Banker's Store, Inc. (the "Store") was established in 1968. It remained
dormant for many years until we completed the acquisition of B.G. Banking
Equipment, Inc., ("B.G. Banking") and Financial Building Equipment Exchange,
Inc., ("FBEE"), Kentucky corporations. We are now in the business of buying,
selling, and trading both new and refurbishing of 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 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 on a quarterly or annual basis and
our operating results may not be consistent with predictions made by securities
analysts.

SUMMARY OF CRITICAL ACCOUNTING POLICIES RELATED PARTY TRANSACTIONS AND
CONTINGENCIES:

ESTIMATES:

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in conformity with accounting principles generally accepted in the United States
of America. The preparation of these 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.

                                       5
<PAGE>

INVENTORIES:

Inventories, consisting primarily of finished goods, are stated at the lower of
cost or market. Cost is determined by the first-in first-out method. Management
monitors and periodically reviews inventory quantities and agings and, when
appropriate, inventory is sold at lower than normal margins in order to reduce
the levels of excess or older goods.

Impairment losses on the equipment and improvements are recognized when events
indicate that the undiscounted cash flows estimated to be generated by such
assets are less than their carrying value and all or a portion of such carrying
value may not be recoverable. We did not recognize any impairment losses during
2004 and 2003.

INCOME TAXES:

Deferred tax assets resulted from temporary differences attributable to
allowance for doubtful accounts, slow-moving inventories, accrued officer salary
and operating loss carryforwards. As of May 31, 2004, we had net operating loss
carryforwards of approximately $67,000 available to reduce future taxable income
which will expire at various dates through 2024. Due to the uncertainties
related to, among other things, the changes in our ownership which, could
subject those loss carryforwards to substantial annual limitation, and the
extent and timing of our future taxable income, we offset the deferred tax
assets attributable to the potential benefits of approximately $67,000 from the
utilization of those net operating loss carryforwards and other deferred tax
assets by an equivalent valuation allowance as of May 31, 2004.

NEW ACCOUNTING PRONOUNCEMENTS:

The Company evaluated new accounting pronouncements and concluded that none of
them had any potential impact on it's financial position, results of operations
or cash flows.

RELATED PARTY TRANSACTIONS:

We have entered into two operating leases with our President and principal
stockholder, Paul Clark for the lease of an aggregate of approximately 32,000
square feet of office and warehouse space located in Bowling Green, Kentucky.
The leases provide for a monthly rent of $7,200 in the aggregate plus applicable
real estate taxes and maintenance expenses. The leases expire in August and
September 2007, respectively.

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 our
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 Store, 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 us 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 us the proceeds of the shares sold. As of May 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.

                                       6
<PAGE>

We may also be forced to defend ourselves 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 May 31, 2004, we have reserved 329,500 shares of common stock pending
possible issuance of shares in satisfaction of outstanding subscription
agreements.

Litigation:

Please see discussion of certain legal proceedings under Item 3.

                                       7
<PAGE>

RESULTS OF OPERATIONS

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


                                                 May 31,
                                          2004            2003
                                         ------------------------

Net sales                                100.0%          100.0%
Cost of sales                             76.0%           72.0%
                                         -----           -----

Gross profit                              24.0%           28.0%

Expenses                                  24.4%           27.0%
                                         -----           -----

Income(loss)from operations                (.4)%            1.0%
Other                                       .4%            (.2)%
                                         -----           -----

Net income                                   -%             .8%
                                         =====           =====



RESULTS OF OPERATIONS FOR THE YEARS ENDED MAY 31, 2004 AND 2003.

Revenues were approximately $2,466,000 for the year ended May 31, 2004 as
compared to approximately $2,623,000 for the year ended May 31, 2003 reflecting
a decrease of approximately $157,000 or 6.0%, primarily in our banking equipment
segment. Sales from a one time contract from one customer accounted for
approximately $450,000 or 17% of revenue in the prior year. Since this customer
was not as significant in the current year and without this customer included in
the prior year's revenues, there would have been a $293,000 or 12% increase.
This increase was attributed to steady increases in financial institution
construction and equipment upgrades. The decrease in actual overall revenues was
partially mitigated by an increase in our office equipment segment of
approximately $114,000 to $266,000 from $152,000 for the year ended May 31,
2004.

Cost of goods sold and related expenses for the year ended May 31, 2004 were
approximately $1,873,000 or 76.0% of net sales as compared to approximately
$1,888,000 or 72.0% of net sales for the year ended May 31, 2003. Gross profit
decreased during the year ended May 31, 2004 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
current year, we sold a higher percentage of new equipment, which resulted in a
lower gross profit margin. In addition, there were substantial sales to a
customer in the prior year that carried a slightly higher gross profit than
normal new equipment sales. Sales to this customer were immaterial in the
current year.

Selling, general and administrative expenses were approximately $603,000 or
24.4% of net sales for the year ended May 31, 2004 as compared to approximately
$708,000 or 27.0% of net sales for the year ended May 31, 2003, reflecting a
decrease of approximately $105,000 or 14.8%. The decrease can be attributable to
a decrease in professional fees during the year.

As a result of the aforementioned, our net income during the year ended May 31,
2004 decreased by approximately $21,000 to a net loss of approximately $1,000 as
opposed to net income of approximately $20,000 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.

We had cash and cash equivalents of $282,443 and working capital of $387,046 at
May 31, 2004. During the year ended May 31, 2004, our cash and cash equivalents
increased by $42,699. Cash and cash equivalents provided by

<PAGE>

operations was $53,835 primarily due to the decrease in inventory of $52,343,
the increase in customer deposits of $62,158 and depreciation and amortization
of 36,551. These changes were partially offset by the increase in accounts
receivable of $36,876 and the decrease in accounts payable and accrued expenses
of 50,965. During the year ended May 31, 2004, we received advances totaling
$26,400 and proceeds from long-term debt of $10,086 and used these proceeds and
other cash sources to purchase $33,003 of fixed assets and to repay $14,619 of
long-term debt.

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 May 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, 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 7. FINANCIAL STATEMENTS


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                                   I N D E X



                                                                            PAGE
                                                                            ----
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                     F-2

CONSOLIDATED:
     BALANCE SHEETS
         MAY 31, 2004 AND 2003                                              F-3

     STATEMENTS OF OPERATIONS
         YEARS ENDED MAY 31, 2004 AND 2003                                  F-4

     STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
         YEARS ENDED MAY 31, 2004 AND 2003                                  F-5

     STATEMENTS OF CASH FLOWS
         YEARS ENDED MAY 31, 2004 AND 2003                                  F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                  F-7



* * *

                                       F-1


<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

We have audited the consolidated balance sheets of THE BANKER'S STORE, INC. AND
SUBSIDIARIES as of May 31, 2004 and 2003, and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Banker's Store,
Inc. and Subsidiaries as of May 31, 2004 and 2003, and their results of
operations and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

Roseland, New Jersey
July 16, 2004

                                                               /s/ J.H. Cohn LLP

                                       F-2



<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                              MAY 31, 2004 and 2003


                          ASSETS                          2004          2003
                          ------                       ----------    ----------

Current assets:
   Cash and cash equivalents                           $  282,443    $  239,744
   Accounts receivable, net of allowance for
       doubtful accounts of $11,626 and $5,120            270,314       221,812
   Inventories                                            619,347       671,690
   Prepaid expenses and other current assets               50,444        53,693
                                                       ----------    ----------
         Total current assets                           1,222,548     1,186,939

Equipment and improvements, net                            83,073        86,621
Other assets                                                7,332         7,332
                                                       ----------    ----------

         Totals                                        $1,312,953    $1,280,892
                                                       ==========    ==========

              LIABILITIES AND STOCKHOLDERS' EQUITY
              ------------------------------------

Current liabilities:
   Current portion of long-term debt                   $   14,533    $   12,267
   Accounts payable and accrued expenses                  109,611       160,576
   Customer deposits                                      253,767       191,609
   Advances from principal stockholder                    415,591       389,191
   Private placement funds in dispute                      42,000        42,000
                                                       ----------    ----------
         Total current liabilities                        835,502       795,643

Long-term debt, net of current portion                      7,133        13,932
                                                       ----------    ----------
         Total liabilities                                842,635       809,575
                                                       ----------    ----------
Commitments and contingencies

Stockholders' equity:
   Common stock, $.01 par value; 80,000,000
       shares authorized; 14,947,215 shares
       issued and outstanding                             149,473       149,473
   Additional paid-in capital                             497,216       497,216
   Accumulated deficit                                   (176,371)     (175,372)
                                                       ----------    ----------
         Total stockholders' equity                       470,318       471,317
                                                       ----------    ----------

         Totals                                        $1,312,953    $1,280,892
                                                       ==========    ==========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-3


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        YEARS ENDED MAY 31, 2004 AND 2003



                                                          2004          2003
                                                       ----------    ----------

Revenue                                                $2,465,924    $2,622,516

Cost of goods sold                                      1,872,910     1,887,785
                                                       ----------    ----------

Gross profit                                              593,014       734,731

Selling, general and administrative expenses              602,701       708,050
                                                       ----------    ----------

Income (loss) from operations                              (9,687)       26,681
                                                       ----------    ----------

Other income (expense):
     Interest and other income                             10,994         1,966
     Interest expense                                      (2,306)       (8,353)
                                                       ----------    ----------
         Totals                                             8,688        (6,387)
                                                       ----------    ----------

Net income (loss)                                      $     (999)   $   20,294
                                                       ==========    ==========

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

Weighted average number of common
     shares outstanding                                14,947,215    14,947,215
                                                       ==========    ==========



SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-4


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        YEARS ENDED MAY 31, 2004 AND 2003



                                                           Retained
                                                           Earnings
                             Common Stock      Additional   (Accum-
                        ---------------------    Paid-in     ulated
                          Shares      Amount     Capital    Deficit)     Total
                        ----------   --------   --------   ---------   --------

Balance, June 1, 2002   14,947,215   $149,473   $497,216   $(195,666)  $451,023
Net income                                                    20,294     20,294
                        ----------   --------   --------   ---------   --------
Balance, May 31, 2003   14,947,215    149,473    497,216    (175,372)   471,317
Net loss                                                        (999)      (999)
                        ----------    -------    -------    ---------   -------
Balance, May 31, 2004   14,947,215   $149,473   $497,216   $(176,371) $(470,318)
                        ==========   ========   ========   =========   ========



SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-5


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        YEARS ENDED MAY 31, 2004 AND 2003


                                                            2004         2003
                                                         ---------    ---------
Operating activities:
  Net income (loss)                                      $    (999)   $  20,294
  Adjustments to reconcile net income (loss)
    to net cash provided by (used in)operating activities:
    Depreciation and amortization                           36,551       33,243
    Provision for doubtful accounts                        (11,626)      (1,747)
    Changes in operating assets and liabilities:
      Accounts receivable                                  (36,876)    (140,559)
      Inventories                                           52,343       82,126
      Prepaid expenses and other current assets              3,249       (2,085)
      Other assets                                                       21,582
      Accounts payable and accrued expenses                (50,965)     (50,089)
      Customer deposits                                     62,158       33,392
                                                         ---------    ---------
        Net cash provided by (used in)
            operating activities                            53,835       (3,843)
                                                         ---------    ---------

Investing activities:
  Capital expenditures                                     (33,003)     (33,167)
  Increase in cash surrender value of officer's
    life insurance                                                       (3,020)
                                                         ---------    ---------
        Net cash used in
        investing activities                               (33,003)     (36,187)
                                                         ---------    ---------

Financing activities:
  Proceeds from notes payable - bank                                    194,000
  Repayment of notes payable - bank                                    (227,900)
  Principal payments on long-term debt                     (14,619)     (18,618)
  Proceeds from long-term debt                              10,086       29,828
  Borrowings from principal stockholder                     26,400       52,818
                                                         ---------    ---------
        Net cash provided by financing activities           21,867       30,128
                                                         ---------    ---------

Net increase(decrease)in cash and cash equivalents          42,699       (9,902)

Cash and cash equivalents, beginning of year               239,744      249,646
                                                         ---------    ---------

Cash and cash equivalents, end of year                   $ 282,443    $ 239,744
                                                         =========    =========

Supplemental disclosure of cash flow information:
  Interest paid                                          $   2,306    $   8,353
                                                         =========    =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                       F-6


<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and principles of consolidation:

The Banker's Store, Inc. (the "Store") was incorporated under the laws of the
State of New York on June 26, 1968. On May 31, 1998, the Company completed the
acquisition of B.G. Banking Equipment, Inc., ("B.G. Banking") and Financial
Building Equipment Exchange, Inc. ("FBEE"), both Kentucky corporations, in
exchange for 11,282,250 shares of its common stock. The acquisition of B.G.
Banking and FBEE by the Store (collectively, the "Company") has been accounted
for as a reverse merger involving a shell company, effectively a
recapitalization of B.G. Banking and FBEE (the operating companies/accounting
acquirers). Accordingly, the historical financial statements of the operating
companies are presented as the historical financial statements of the
registrant. The results of operations of the Store (legal acquirer) are included
in the consolidated financial statements since May 31, 1998, the date of the
merger. All significant intercompany accounts and transactions have been
eliminated in consolidation. The Company is in the business of buying, selling,
trading and refurbishing financial equipment for banks and other financial
institutions. During 2002, the Company commenced the business of buying and
selling office equipment.

Use of estimates:

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and disclosures.
Actual results could differ from those estimates.

Revenue recognition:

Revenue is recognized when products are shipped or services are rendered.

Cash and cash equivalents:

The Company considers all highly-liquid debt instruments with an original
maturity of three months or less when purchased to be cash equivalents.

Inventories:

Inventories, consisting primarily of finished goods, are stated at the lower of
cost or market utilizing the first-in, first-out method.

Equipment and improvements:

Equipment and improvements are stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization have been provided utilizing the
straight-line method over the estimated useful lives of the assets.

Customer deposits:

Customer deposits represent amounts advanced by customers at the time orders
were placed and are used to reduce the customers' accounts receivable balances
upon shipment of the order.

                                       F-7


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(concluded):

Net earnings (loss) per share:

The Company presents "basic" earnings (loss) per share and, if applicable,
"diluted" earnings per share pursuant to the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings per Share". Basic earnings
(loss) per share is calculated by dividing net income or loss by the weighted
average number of 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 during the years ended May 31, 2004 and 2003.

Income taxes:

The Company accounts for income taxes pursuant to the asset and liability method
which requires deferred income tax assets and liabilities be computed for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.

NOTE 2 - EQUIPMENT AND IMPROVEMENTS:

Equipment and improvements consist of the following:



                                   Range of
                                  Estimated
                                 Useful Lives     2004       2003
                                -------------   --------   --------
Machinery and equipment         3 to 10 years   $177,478   $169,487
Transportation equipment        5 years          263,753    239,648
Computer equipment              5 years           18,830     16,983
Furniture and fixtures          5 years           36,957     36,653
Leasehold improvements          3 years           25,607     26,851
                                                --------   --------
       Totals                                    522,625    489,622

Less accumulated depreciation
  and amortization                               439,552    403,001
                                                --------   --------

       Totals                                   $ 83,073   $ 86,621
                                                ========   ========

Depreciation and amortization amounted to $36,551 and $33,243 for the years
ended May 31, 2004 and 2003 respectively.

                                       F-8


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - NOTES PAYABLE - BANK:

The Company has a $150,000 revolving line of credit with borrowings bearing
interest at .25% above the prime rate and guaranteed by the Company's principal
stockholder. The line of credit expires on November 4, 2004. At May 31, 2004,
the Company has no outstanding borrowings under the line.

NOTE 4 - LONG-TERM DEBT:

Long-term debt consists of the following notes which are collateralized by
transportation equipment:



                                                     2004         2003
                                                   -------      -------
Equipment obligations bearing interest
  at 15.3% collateralized by the
  underlying equipment and matures
  in 2005                                          $   690      $ 3,201

8.25% notes, payable in monthly installments
  of $336, including interest and maturing
  July 2005                                          4,489        7,979

7% notes, payable in monthly installments
  of $357, including interest and maturing
  October 2005                                       5,758        9,487

8% notes, payable in monthly installments
  of $239, including interest and maturing
  in June 2005                                       3,005        5,532

6% notes, payable in monthly installments
  of $307, including interest and maturing
  in July 2006                                       7,724          --
                                                   -------      -------
  Totals                                            21,666       26,199

Less current portion                                14,533       12,267
                                                   -------      -------

Long-term portion                                  $ 7,133      $13,932
                                                   =======      =======



Principal amounts due under the above obligations in each of the years
subsequent to May 31, 2004 are $14,533 in 2005, $6,228 in 2006 and $905 in 2007.

NOTE 5 - ADVANCES FROM PRINCIPAL STOCKHOLDER:

Fom time-to-time, the president and principal stockholder advances cash to the
Company. These advances are noninterest bearing and are to be repaid upon
demand.

                                       F-9

<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - INCOME TAXES:

The provision for income taxes differs from the amounts computed using the
Federal statutory rate of 34% as a result of the following:



                                                      2004      2003
                                                     ------    ------

   Expected provision at Federal statutory rate       (34)%      34%
   Effect of state taxes, net of Federal
     income tax effect                                 (6)        6
   Utilization of net operating loss                   40       (40)
                                                     ------    ------
             Effective tax rate                        --%        --%
                                                     ======    ======

Deferred tax assets resulted from temporary differences attributable to
depreciation, allowance for doubtful accounts and slow-moving inventories,
accrued officer salaries and operating loss carryforwards. As of May 31, 2004,
the Company had net operating loss carryforwards of approximately $67,000
available to reduce future Federal taxable income which will expire at various
dates through 2024. 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 limitation, and the extent and timing of its
future taxable income, the Company offset the deferred tax assets attributable
to the potential benefits of approximately $127,000 from the utilization of
those net operating loss carryforwards and other deferred tax assets by an
equivalent valuation allowance as of May 31, 2004. The Company has also offset
the potential benefits from deferred assets of approximately $147,000 by
equivalent valuation allowance as of May 31, 2003. Significant components of the
Company's deferred tax assets as of May 31, 2004 and 2003 are as follows:


                                            2004           2003
                                         ---------      ---------
Deferred tax assets:
  Net operating loss carryforwards       $  27,000      $  63,000
  Accrued officer salary                    83,000         69,000
  Inventory reserve                         13,000         13,000
  Other                                      4,000          2,000
                                         ---------      ---------
                                           127,000        147,000
Valuation allowance for deferred
  tax assets                              (127,000)      (147,000)
                                         ---------      ---------
Deferred tax assets                      $      --      $      --
                                         =========      =========


NOTE 7 - RELATED PARTY TRANSACTIONS:

The Company has entered into two operating leases with its President and
principal stockholder for the lease of an aggregate of 31,616 square feet of
office and warehouse space located in Bowling Green, Kentucky. The leases
provide for a monthly rent of $7,200 plus applicable real estate taxes and
maintenance expenses. The leases expire in August and September 2004,
respectively.



                                      F-10

<PAGE>

                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - RELATED PARTY TRANSACTIONS (CONCLUDED):



The Company is obligated to its President and principal stockholder for rent of
$18,800 in 2005 under the aforementioned leases.

Related rent expense amounted to $86,400 and $86,789 for the years ended May 31,
2004 and 2003, respectively.

NOTE 8 - CONTINGENCIES:

Private placement - B.G. Banking:

Prior to the Store's reverse merger with B.G. Banking and FBEE (see Note 1),
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. 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 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 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 May
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 purchases 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.

                                      F-11


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CONTINGENCIES (CONTINUED):

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

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 May 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 and 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, 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 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 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
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.

                                      F-12


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - 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 is 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 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 thereby the
action has been transferred to the New York State Supreme Court, Delaware
County. The Company is awaiting a date for a hearing on plaintiff's damages. The
Company intends to continue to litigate this action.

Concentrations of credit risk:

Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash and cash equivalents and accounts
receivable. The Company places its cash and cash equivalents with high credit
quality institutions to limit its credit exposure. Cash balances are insured by
the Federal Deposit Insurance Corporation up to $100,000 per depositor. The
Company's cash balances with financial institutions, at times, may exceed
Federal Deposit Insurance Corporation insured limits. At May 31, 2004, the
Company has cash and cash equivalent balances that exceed Federally insured
limits in the amount of approximately $62,000.

The Company closely monitors the extension of credit to its customers while
maintaining allowances for potential credit losses. On a periodic basis, the
Company evaluates its accounts receivable and establishes an allowance for
doubtful accounts, based on a history of past write-offs and collections and
current credit considerations.

In the year ended May 31, 2003, one customer accounted for approximately 16% of
total sales.

                                      F-13


<PAGE>


                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company's material financial instruments at May 31, 2004 for which
disclosure of estimated fair value is required by certain accounting standards
consisted of cash and cash equivalents, accounts receivable and accounts
payable, advances from principal stockholder and long-term debt. In the opinion
of management, (i) cash and cash equivalents, accounts receivable and accounts
payable were carried at values that approximated their fair value because of
their liquidity and/or their short-term maturities; (ii) long-term debt were
carried at values that approximated their fair values because they had interest
rates equivalent to those currently prevailing for financial instruments with
similar characteristics and (iii) although management does not believe that
there is a practical method that can be used to specifically determine the fair
value of the advances from the principal stockholder, because of the
relationship of the Company and its stockholders, it believes that these
advances will be repaid on a short-term basis and, accordingly, the carrying
value of the advances approximates fair value.

NOTE 10 - 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, 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.


                                      F-14


<PAGE>
                    THE BANKER'S STORE, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - SEGMENT INFORMATION (CONCLUDED):

Net sales, cost of sales and other related segment information follows:

                                          2004               2003
                                       ----------         ----------

Revenue:
    Banking Equipment                  $2,199,831         $2,470,846
    Office Equipment                      266,093            151,670
                                       ----------         ----------
          Totals                        2,465,924          2,622,516
                                       ----------         ----------

Cost of goods sold:
    Banking Equipment                   1,712,962          1,780,745
    Office Equipment                      159,948            107,040
                                       ----------         ----------
          Totals                        1,872,910          1,887,785
                                       ----------         ----------

Gross profit:
    Banking Equipment                     486,869            690,101
    Office Equipment                      106,145             44,630
                                       ----------         ----------
          Totals                          593,014            734,731
                                       ----------         ----------

Segment assets:
    Inventories:
       Banking Equipment                  608,912            670,819
       Office Equipment                    10,435                871
                                       ----------         ----------
          Totals                          619,347            671,690

    Other assets                          693,606            609,202
                                       ----------         ----------

          Total assets                 $1,312,953         $1,280,892
                                       ==========         ==========



* * *

                                      F-15


<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 8A. CONTROLS AND PROCEDURES

a) Disclosure controls and procedures. Based upon an evaluation, supervised by
Paul Clark, our President, Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures concluded that our disclosure controls and procedures were effective
as of May 31, 2004.

(b) Internal controls. During the year ended May 31, 2004, there were no
significant changes in our internal accounting controls or in other factors that
materially affected our internal controls over financial reporting.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

All information presented in this Item is as of August 5, 2004. The following
table and notes thereto lists: (1) the names and ages of all directors and
executive officers of the Company; (2) the positions and offices that each
person holds with the Company; (3) the term of office as a director and/or
executive officer, and the period during which the person has served as a
director and/or executive officer; and (4) any arrangement or understanding
between the director and/or executive officer and any other person, pursuant to
which they are, or are to be, selected as a director and/or executive officer*.



NAME                    AGE     POSITION
----                    ---     --------
Paul D. Clark**         61      President, Director, and Chief Executive Officer
Roberta Clark**         59      Secretary and Director
Albert Blankenship      71      Former Chief Financial Officer and Director

* There are no arrangements or understandings between any director and/or
executive officer and any other person, pursuant to which they are, or are to
be, selected as a director and/or executive officer.

** Paul D. Clark and Roberta Clark are husband and wife.

PAUL D. CLARK is the founder of B.G. Banking Equipment, Inc. (formerly AAA
Alarms and Services, Inc., March 1977). He has been our President, CEO and a
Director since 1998. He has worked in a variety of management and sales
positions in the electronic security and banking equipment industries as well as
the U.S. Navy. His education and training were from several technical schools
including an Industrial Electronics degree received in 1970. Mr. Clark also
received medical electronics specialist training and was an interior
communication electrician with the United States Naval Submarine Service. Mr.
Clark also attends specialized educational courses annually to stay current in
the field of security.

ROBERTA CLARK has served as our Secretary and a Director since May 1998. From
1977 to 1998, Ms. Clark served in similar positions at AAA Alarms. She attended
Colorado State University in Fort Collins, Colorado, where she received a B.A.
in Art in 1965.

                                       9
<PAGE>

ALBERT E. BLANKENSHIP had been our Chief Financial Officer and a Director since
1998. From approximately 1990, he had been a practicing accountant. He had
extensive financial experience in a variety of industries, with both publicly
and privately held corporations. He also managed financial and tax affairs for a
variety of corporate clients. He served as the Chief Financial Officer and a
director of Helionics, Inc. of Franklin, Kentucky. Mr. Blankenship received his
B.S. in Business Administration from Bowling Green (KY) College of Commerce, and
is a retired U.S. Army officer. He held certificate #871 for state board of
accountancy effective 2-14-62. Mr. Blankenship passed away on August 14, 2004.

None of the directors, officers, promoters or control persons have, in the last
five years: (1) had any voluntary or involuntary bankruptcy with any other
company, general partnership or executive officership; (2) had any conviction in
a criminal proceeding nor was subjected to a pending criminal proceedings; (3)
been the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoined, barred, suspended or otherwise limited in their
involvement in any type of business, securities or banking activities; and (4)
been found by a court of competent jurisdiction (in a civil action), the SEC or
the Commodity Futures Trading Commission to have violated any federal or state
securities or commodities law, or where the judgment has not otherwise been
reversed, suspended or vacated.

We do not have an audit committee of our board of directors, and, as noted
above, our former Chief Financial Officer and Director, Albert Blankenship,
recently passed away. We have not yet adopted a code of ethics for our officers
and directors primarily because the size of our company and our relatively few
officers and directors make the formulation of such a code less significant when
compared with other priorities of running our business. As time and our budget
justify, we will consider implementing such a plan going forward.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

Based solely on a review of Forms 3 and 4, and amendments thereto furnished to
the Company under Rule 16a-3(e) promulgated under the Securities Exchange Act of
1934 during the most recent fiscal year, and Form 5 and amendments thereto
furnished to the Company with respect to its most recent fiscal year, all
reports required under Section 16(a) of the Securities Exchange Act of 1934 were
timely filed.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth the salary for Company's last three completed
fiscal years for the named executive officers. Unless otherwise indicated, no
bonus, other annual compensation, restricted stock awards, securities underlying
options or stock appreciation rights, long-term incentive plan payouts, or other
long-term compensation was awarded.

                           SUMMARY COMPENSATION TABLE



NAME AND PRINCIPAL POSITION                 YEAR           ANNUAL COMPENSATION
---------------------------                 ----           -------------------
Paul D. Clark,                              2004           $ 78,500
CEO, CFO and                                2003           $126,500
President                                   2002           $ 75,600

Mr. Clark's annual contract was for $78,000 in 2001, $126,500 in 2002 and
$126,500 in 2003. The balance not paid in cash is deferred into a note payable
to Mr. Clark. No other executive officer was compensated in excess of $100,000
for the past three (3) fiscal years. As of June 1, 2003, Mr. Clark's salary was
reduced to $78,000.

DIRECTORS' COMPENSATION

The directors have not received any compensation for their services. We have
adopted, through attrition, the plan B.G. Banking Equipment has had in place for
approximately 7 years that provides an annuity and life insurance as part of
profit sharing. There is also a group health insurance policy of which 2/3 of
the cost is paid for by the Banker's Store.

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<PAGE>

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

On February 1, 1998, we entered into an employment agreement with Paul D. Clark,
in which we employed Mr. Clark for a successive three-year term. The agreement
provides for an initial base salary of $78,000 per year, and further provides
for family health insurance, a $100,000 whole life insurance plan, 15 vacation
days and five (5) personal days. Mr. Clark's Employment Agreement is terminable
upon the occurrence of anyone of the following: (1) employee's death, (2) our
failure, as evidenced by filing under the Bankruptcy Act for liquidation, or the
making of an assignment for the benefit of creditors; or (3) a material breach
of the agreement executed. This agreement was subsequently extended on a
year-to-year basis, effective February 1, 2001, on substantially the same terms.
Mr. Clark's current salary under the agreement is $126,500.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table sets forth the ownership of our securities as of August 16,
2004, by our officers and directors and by any person who is known to us to be
the beneficial owner of more than 5% of our common stock, $.01 par value per
share:



                                            SHARES
                                            BENEFICIALLY
NAME AND ADDRESS                            OWNED                  PERCENTAGE
----------------                            ------------           ----------
Paul D. Clark                               6,631,815              44.37%
1985 Claypool Alvaton Rd
Bowling Green, Kentucky 42101

Roberta Clark                               6,631,815              44.37%
1985 Claypool Alvaton Rd
Bowling Green, Kentucky 42101

Albert Blankenship                            131,257               0.88%
628 Sherwood Drive
Bowling Green, Kentucky 42101

There are no arrangements which may result in a change in control of the
Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We presently occupy approximately 32,000 square feet of office, warehouse,
showroom and shop space in two separate locations in Bowling Green, Kentucky,
for an aggregate monthly rental of $7,200, pursuant to lease agreements with our
President, Paul D. Clark, as owner of the property. Related rent expense
amounted to $86,400 and $86,789 for the fiscal years ended May 31, 2004 and
2003, respectively.

The Banker's Store owed Mr. Clark an aggregate sum of $415,891 as of May 31,
2004. This amount consisted primarily of inventory purchased from Mr. Clark in
May 1999, and compensation accrued but not paid.

                                       11
<PAGE>

ITEM 13. EXHIBITS

EXHIBIT NUMBER AND DESCRIPTION OF DOCUMENT

2.1     Agreement of Business Combination By Stock Exchange, dated April 15,
        1998, by and between BG Banking Equipment and Maritime Transport &
        Technology, Inc. (2)

3.1     Certificate of Incorporation of The Banker's Store, Inc., as amended.
        (1)

3.2     Articles of Incorporation of Financial Building Equipment Exchange, Inc.
        (1)

3.3     Articles of Incorporation as amended of BG Banking Equipment, Inc. (1)

3.4     Bylaws of The Banker's Store, Inc. (1)

4.1     Specimen Common Stock Certificate. (2)

10.1    Business Lease, dated August 1, 1998, by and between Paul D. Clark and
        Maritime Transport and Technology, Inc. (dba The Bank Store and dba BG
        Banking Equipment, Inc.)(2)

10.2    Employment Agreement, dated February 1, 1998, by and between Maritime
        Transport & Technology, Inc. (dba The Bank Store and dba BG Banking
        Equipment, Inc.) and Paul Clark. (2)

21.1    Subsidiaries of the Company. (1)

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

32.1    Certification of Paul Clark


(1) Incorporated herein by reference from the Company's Form 10-K filed for the
year ending May 31, 1998.

(2) Incorporated herein by reference from the Company's Form 10-K filed for the
year ending May 31, 2000.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES FOR FISCAL YEAR 2004

During the fiscal year ended May 31, 2004, we were billed and paid J.H. Cohn
LLP, our principal accountant for the audit of our annual financial statements
and review of our quarterly financial statements, $54,616.

AUDIT FEES FOR FISCAL YEAR 2003

During the fiscal year ended May 31, 2003, we were billed and paid J.H. Cohn
LLP, our principal accountant for the audit of our annual financial statements
and review of our quarterly financial statements, $51,529.



TAX FEES

During the fiscal years ended May 31, 2004 and 2003, we were billed and paid
J.H. Cohn $5,665 and $5,250, respectively, for tax preparation work.

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<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

The Banker's Store, Inc.




BY: /S/ PAUL D. CLARK
    ------------------------------
    PAUL D. CLARK PRESIDENT, CEO,
    CFO &  DIRECTOR



Dated: August 30, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.





/S/ PAUL D. CLARK                                        DATED: AUGUST 30, 2004
-------------------------------
PAUL D. CLARK PRESIDENT, CEO, CFO, &
DIRECTOR

/S/ ROBERTA CLARK                                        DATED: AUGUST 30, 2004
-------------------------------
ROBERTA CLARK SECRETARY & DIRECTOR

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