**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, 2006**


*COMMISSION
      FILE NO.: 000-08880*





**THE
      BANKER'S STORE, INC.**


(Exact
      Name of Registrant in its Charter)




NEW
                  YORK
              22-3755766State
                  or Other Jurisdiction Of Incorporation or Organization)
              (I.R.S.
                  Employer 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 is not required to file reports pursuant to Section 13 or
      15(d) or the Exchange Act. o





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 o No.





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


o Yes x 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, 2006, the issuer's revenues were $2,456,015.





As
      of
      August 18, 2006, the aggregate market value of the voting and non-voting common
      equity held by non-affiliates of the Registrant was approximately $135,287.
      This
      aggregate market value is computed by reference to the last sale price of such
      common equity on such date. As of August 18, 2006, the Registrant had 14,954,781
      shares of common stock outstanding.





Transitional
      Small Business Format o Yes x No
















**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. 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.





**OUR
      BUSINESS**





**Principal
      Products and Services and Their Markets.**





Our
      principal products 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.





We
      sell
      new and pre-owned equipment which has been 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.





In
      June
      of 2001, we entered into the office equipment and retail furniture business,
      selling to commercial and industrial customers.





**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
      three sales representatives who operate in Kentucky, Tennessee and bordering
      states who service customers over the telephone, via internet, on location,
      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 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 the cost of a new product. We also compete by allowing customer trade-in,
      consignment, or repurchasing of our customers' excess equipment. From time
      to
      time, we cooperate with competitors who, like us, are independent suppliers
      of
      banking equipment in fulfilling large orders or supplying each other with pieces
      of equipment that may otherwise be more difficult to locate.





2




Once
      space is available, we plan to install a permanent display area for drive-up
      systems, which we currently use warehouse space to demonstrate. When complete,
      we plan to have a showplace for the latest bank related equipment for display
      and demonstration including banking delivery systems, ATMs, check cashing
      equipment and other cash handling machines. As planned, the showroom will allow
      our customers to compare products from different manufacturers. By appointment,
      our prospective customers can bring drawings of upcoming projects and we will
      provide brochures, schematics and cut sheets for the architect or builder with
      complete specifications of all our products, including office furniture.





**Product
      Sources and Principal Suppliers.**





Because
      of a large number of mergers in the past decade among banks, resulting in the
      closing of many branches, we have been able to stockpile some quantities of
      equipment for resale. This equipment also 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, and
      other features, we buy from several manufacturers 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 with ten branches or
      less.
      We have not had any one customer who has accounted for more than 10% of total
      revenues during the year ended May 31, 2006.





**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 18, 2006, we employed 19 full-time employees. Paul Clark serves as our
      President, and Roberta Clark as our corporate Secretary. We have three persons
      employed in sales, two persons in administrative capacities and one clerical
      worker. We also have four persons engaged in installation, and seven in service
      activities in the field.




3




**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 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 renewed to 2007 on substantially the same
      terms. We also pay $2,200 per month, plus 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 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 .





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. There
      has
      been no further activity of record in the case since the order of
      transfer.





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.





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.
      Effective May 19, 2006, the Manatee County Circuit Court in Brandenton,
      Florida dismissed the action pending against The Banker's Store, Inc. (the
      "Company"), B.G. Banking Equipment, Inc., and Paul D. Clark for failure to
      prosecute.


4





**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, RELATED STOCKHOLDER MATTERS, AND SMALL BUSNESS
      ISSUER PURCHASES OF EQUITY SECURITIES**





**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, 2004. 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, 2004
            
            $
            0.06
            
            $
            0.06November
                30, 2004
            
            
            0.08
            
            
            0.05February
                28, 2005
            
            
            0.15
            
            
            0.07May
                31, 2005
            
            
            0.19
            
            
            0.13August
                31, 2005
            
            
            0.13
            
            
            0.07November
                30, 2005
            
            
            0.17
            
            
            0.08February
                28, 2006
            
            
            0.45
            
            
            0.09May
                31, 2006
            
            
            0.12
            
            
            0.06




**Holders
      of our Securities.**





The
      approximate number of holders of record of our common Stock, as of August 18,
      2006, was 898. This information was obtained from Continental Stock Transfer
      & Trust Company, our transfer agent.





**Dividends.**





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





**Equity
      Compensation Plans**





The
      Company maintains no equity compensation plans.





**Recent
      Sales of Unregistered Securities**





The
      Company has made no sales of unregistered securities within the past three
      years.





**Purchase
      of Equity Securities by the Small Business Issuer and Affiliated
      Purchasers**





The
      Company did not purchase any of its securities during the fourth quarter of
      the
      fiscal year ended May 31, 2006.





5




**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,
      trading and refurbishing financial equipment (both new and pre-owned) for banks
      and other financial institutions. We also sell office equipment and furniture
      at
      retail. 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 our ability to obtain new products
      at
      competitive prices, sources of good used banking and banking related equipment
      and furniture at favorable prices, market acceptance of current or new products,
      delays, or inefficiencies, shipping problems, seasonal customer demand, the
      timing of significant orders, competition for customers and markets, competitive
      pressures on average selling prices and changes in the mix of products sold.





Operating
      results could also be adversely affected by a downturn in the market for our
      current and future products, order cancellations, order rescheduling or
      remanufacturing 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 could be adversely affected if
      our
      sales do not correspondingly increase or if our product development efforts
      are
      unsuccessful or are subject to delays.





**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.





**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 2006
      and
      2005.





**Income
      Taxes:**





Deferred
      tax assets resulted from temporary differences attributable to allowance for
      doubtful accounts, slow-moving inventories, accrued officer salary and other
      temporary differences. Due to the uncertainties related to the extent and timing
      of our future taxable income, we
      have
      established a valuation allowance in prior periods. In 2006, we decreased the
      valuation allowance in an amount equivalent to current income tax expense.





6




**New
      Accounting Pronouncements:**





The
      Company evaluated new accounting pronouncements and concluded that none of
      them
      had any potential impact on its 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 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, 2006, 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 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.





In
      December 2004, the Company issued 7,500 shares of common stock to one of the
      subscribers.





As
      of May
      31, 2006, we have reserved 322,000 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




**Results
      of Operations**





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


Twelve
                months endedMay
                31,2006
            
            2005Net
                sales
            
            
            100.0
            %
            
            100.0
            %Cost
                of sales
            
            
            67.7
            %
            
            70.7
            %Gross
                profit
            
            
            32.3
            %
            
            29.3
            %Selling,
                general and administrative expenses
            
            
            29.5
            %
            
            25.0
            %Income
                (loss) from operations
            
            
            2.8
            %
            
            4.3
            %Other
            
            
            -0.4
            %
            
            -0.8
            %Income
                before income tax provision
            
            
            2.4
            %
            
            3.5
            %Income
                tax provision
            
            
            0.0
            %
            
            0.0
            %Net
                income (loss)
            
            
            2.4
            %
            
            3.5
            %





**Results
      of Operations for the Years Ended May 31, 2006 and 2005.**





Revenues
      were approximately $2,456,015 for the year ended May 31, 2006 as compared to
      approximately $2,878,711 for the year ended May 31, 2005 reflecting a decrease
      of approximately $422,696 or 15%. The decrease in revenues during the year
      ended
      May 31, 2006 is primarily due to the loss of business resulting from the
      addition of a subdealer in our Tennessee territory by one ATM manufacturer.
      This
      subdealer, who was buying through us, is now able to buy direct from the
      manufacturer. This resulted in a 38% decrease in our Tennessee sales of ATM's
      and traditional equipment.





Cost
      of
      goods sold and related expenses were $1,662,560 for the year ended May 31,
      2006
      as compared to approximately $2,034,061 for the year ended May 31, 2005
      reflecting a decrease of approximately $371,501 or 19%. This decrease is a
      product of the decrease in sales in Tennessee.





Gross
      profit decreased by approximately $51,195 during the year ended May 31, 2006
      primarily due to decreased sales volume in our Tennessee territory.





Selling,
      general and administrative expenses were approximately $725,268 for the year
      ended May 31, 2006 as compared to approximately $719,211 for the year ended
      May
      31, 2005, reflecting an increase of approximately $6,057 or 1%. We attribute
      this increase to added fuel costs, increasing freight charges, and incremental
      increases in all necessary business operations.




As
      a
      result of the aforementioned, our net income during the year ended May 31,
      2006
      decreased by approximately $42,498 to approximately $58,563 as compared to
      net
      income of approximately $101,061 for the previous fiscal year.





8




**Liquidity
      and Capital Resources**





We
      have
      financed our operations primarily through revenues from operations.





We
      had
      cash and cash equivalents of $354,688 and working capital of $514,152 at May
      31,
      2006. During the year ended May 31, 2006, our cash and cash equivalents
      increased by $117,300. Net cash and cash equivalents provided by operations
      were
      $121,092 which increased primarily from a decrease in inventory of $35,198
      and
      in accounts receivable of $140,715 and was partially offset by a decrease in
      accounts payable of $74,849. During the year ended May 31, 2006, long-term
      debt,
      which consisted of six car loans, was reduced by $12,550. Three of these car
      loans were retired.





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
      also
      desire to expand our customer base and enter additional markets. To accomplish
      these goals, we are currently evaluating a number of strategies and related
      steps. We may hire additional sales personnel in order to reach potential
      customers in new markets and additional customers in existing markets. We may
      consider and evaluate opportunities to grow and expand through mergers or
      acquisitions. We may strengthen our management team by adding one or more
      individuals.





Our
      ability to effect any of these strategies or to take any of these steps will
      depend on a number of factors including, without limitation: our ability to
      generate sufficient cash flow or obtain sufficient capital on reasonable terms;
      our ability to locate and hire qualified personnel on satisfactory terms and
      conditions, the availability of attractive candidates for merger or acquisition
      on reasonable terms and conditions; continued demand for our products and
      services; our ability to withstand increased competitive pressures; and economic
      conditions within the financial services industry and within the markets we
      serve. There is no assurance that we will be able to meet any or all of our
      goals.





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, 2007. 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.





9




**ITEM
      7. FINANCIAL STATEMENTS**







**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**INDEX**






**Page**Report
                of Independent Registered Public Accounting Firm
            F-2Condensed
                Consolidated:Balance
                SheetsMay
                31, 2006 and 2005
            F-3Statements
                of OperationsYears
                ended May 31, 2006 and 2005
            F-4Statements
                of Changes in Stockholder's EquityYears
                ended May 31, 2006 and 2005
            F-5Statements
                of Cash FlowsYears
                ended May 31, 2006 and 2005
            F-6Notes
                to Consolidated Financial Statements
            F-7





F-1







**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors and Stockholders





We
      have
      audited the accompanying consolidated balance sheets of The Banker's Store,
      Inc.
      and Subsidiaries as of May 31, 2006 and 2005, 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 audit.





We
      conducted our audit 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. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company's internal control over financial
      reporting. Accordingly, we express no such opinion. 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 audit provides
      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, 2006 and 2005, 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.




/s/
        Marmann & Associates, PC
 Marmann
        & Associates, PC
 Sheffield,
        Alabama
 August
        3,
        2006




F-2




**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**MAY
      31, 2006 AND 2005**




**MAY
                31,****ASSETS**
            
            **2006**
            
            **2005**Current
                Assets:Cash
                and cash equivalents
            
            $
            354,688
            
            $
            237,388Accounts
                receivable, net of allowance for bad debts of $4,043 in 2006 and
                $3,048 in
                2005
            
            
            286,137
            
            
            426,852Inventories
            
            
            676,580
            
            
            711,778Prepaid
                expenses and other current assets
            
            
            27,549
            
            
            44,444Total
                current assets
            
            
            1,344,954
            
            
            1,420,462Equipment
                and improvements, net
            
            
            94,866
            
            
            105,755Other
                assets
            
            
            20,467
            
            
            832Totals
            
            $
            1,460,287
            
            $
            1,527,049**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                Liabilities:Current
                portion of long-term debt
            
            $
            8,454
            
            $
            12,497Accounts
                payable and accrued expenses
            
            
            141,475
            
            
            216,324Customer
                deposits
            
            
            176,482
            
            
            237,808Note
                payable - principal stockholder
            
            
            207,991
            
            
            207,991Accrued
                compensation - principal stockholder
            
            
            254,400
            
            
            231,000Private
                placement funds in dispute
            
            
            42,000
            
            
            42,000Total
                current liabilities
            
            
            830,802
            
            
            947,620Long-term
                debt, net of current portion
            
            
            1,543
            
            
            10,050Total
                liabilities
            
            
            832,345
            
            
            957,670Commitments
                and contingenciesStockholders'
                equity:Common
                stock, $.01 par value; 80,000,000 shares authorized; 14,954,781 and
                14,954,715 shares issued and outstanding
            
            
            149,548
            
            
            149,548Additional
                paid-in capital
            
            
            497,141
            
            
            497,141Less:
                treasury stock 2,000 shares (at cost)
            
            
            (2,000
            )
            
            (2,000
            )Accumulated
                (deficit) earnings
            
            
            (16,747
            )
            
            (75,310
            )Total
                stockholders' equity
            
            
            627,942
            
            
            569,379Totals
            
            $
            1,460,287
            
            $
            1,527,049




The
      accompanying notes are an integral part of these financial
      statements.




F-3


**BANKER'S
        STORE, INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 **MAY
        31, 2006 AND 2005**
  **MAY
                    31,****2006**
                
                **2005**Revenue
                
                $
                2,456,015
                
                $
                2,878,711Cost
                    of goods sold
                
                
                1,662,560
                
                
                2,034,061Gross
                    profit
                
                
                793,455
                
                
                844,650Selling,
                    general and administrative expenses
                
                
                725,267
                
                
                719,211Income
                    (loss) from operations
                
                
                68,188
                
                
                125,439Other
                    income (expense):Interest
                    and other income (expenses)
                
                
                7,489
                
                
                (22,118
                )Interest
                    expense
                
                
                (17,114
                )
                
                (2,260
                )Total
                    other income (expense):
                
                
                (9,625
                )
                
                (24,378
                )Income
                    before income tax provision
                
                
                58,563
                
                
                101,061Income
                    tax provision
                
                
                -
                
                
                -Net
                    income
                
                $
                58,563
                
                $
                101,061Basic
                    earnings (loss) per common share
                
                $
                0.00
                
                $
                0.01Diluted
                    earnings (loss) per share
                
                $
                0.00
                
                $
                0.01
  The
        accompanying notes are an integral part of these financial
        statements.
  F-4


**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**CONDENSED
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY**


**MAY
      31, 2006 AND 2005**




RetainedAdditional
            
            EarningsCommon
                Stock
            
            Paid-in
            
            (Accumulated
            
            TreasuryShares
            
            Amount
            
            Capital
            
            Deficit)
            
            Stock
            
            TotalBalance
                May 31,2004
            
            
            14,947,215
            
            $
            149,473
            
            $
            497,216
            
            $
            (176,371
            )
            $
            -
            
            $
            470,318Shares
                issued
            
            
            7,500
            
            
            75
            
            
            (75
            )
            
            -
            
            
            -
            
            
            -Treasury
                stock
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,000
            )
            
            (2,000
            )Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            101,061
            
            
            -
            
            
            101,061Balance
                May 31,2005
            
            
            14,954,715
            
            $
            149,548
            
            $
            497,141
            
            $
            (75,310
            )
            $
            (2,000
            )
            $
            569,379Shares
                issued
            
            
            66
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Treasury
                stock
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                income
            
            
            -
            
            
            -
            
            
            -
            
            
            58,563
            
            
            -
            
            
            58,563Balance
                May31,2006
            
            
            14,954,781
            
            $
            149,548
            
            $
            497,141
            
            $
            (16,747
            )
            $
            (2,000
            )
            $
            627,942





The
      accompanying notes are an integral part of these financial
      statements.





F-5





**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**TWELVE
      MONTHS ENDED MAY 31, 2006 AND 2005**





**MAY
                31,****2006**
            
            **2005**Operating
                activitiesNet
                income (loss)
            
            $
            58,563
            
            $
            101,061Adjustments
                to reconcile net income (loss) to net cash provided by (used in)
                operating
                activities:Depreciation
                and amortization
            
            
            25,532
            
            
            28,664Provision
                for doubtful accounts
            
            
            (995
            )
            
            (1,380
            )Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            141,710
            
            
            (155,157
            )Inventories
            
            
            35,198
            
            
            (92,430
            )Prepaid
                expenses and other current assets
            
            
            16,895
            
            
            6,000Other
                assets
            
            
            (19,636
            )
            
            6,498Accounts
                payable and accrued expenses
            
            
            (74,849
            )
            
            106,713Customer
                deposits
            
            
            (61,326
            )
            
            (15,959
            )Net
                cash provided by (used in) operating activities
            
            
            121,092
            
            
            (15,990
            )Investing
                activitiesCapital
                expenditures, net of writeoffs
            
            
            (14,642
            )
            
            (51,346
            )Net
                cash (used in) investing activities
            
            
            (14,642
            )
            
            (51,346
            )Financing
                activitiesIncrease
                (decrease) in long-term debt, net
            
            
            (12,550
            )
            
            (18,319
            )Proceeds
                from long-term debt
            
            
            -
            
            
            19,200Loan
                payable - Borrowing from principal stockholder
            
            
            23,400
            
            
            23,400Common
                stock issued
            
            
            -
            
            
            (75
            )Purchase
                of Treasury stock
            
            
            -
            
            
            (2,000
            )Additional
                paid in capital
            
            
            -
            
            
            75Net
                cash provided by financing activities
            
            
            10,850
            
            
            22,281Net
                increase (decrease) in cash and cash equivalents
            
            
            117,300
            
            
            (45,055
            )Cash
                and cash equivalents, beginning of period
            
            
            237,388
            
            
            282,443Cash
                and cash equivalents, end of period
            
            $
            354,688
            
            $
            237,388Supplemental
                disclosure of cash flow information:Interest
                paid
            
            $
            16,809
            
            $
            2,260Income
                taxes paid
            
            $
            24,999
            
            $
            -





The
      accompanying notes are an integral part of these financial
      statements.




F-6





**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 2001, 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:





The
      Company records sales of furniture and equipment when the products are shipped.
      In sales that require installation, the Company generally obtains customer
      deposits and invoices the customer on completion of the contractual obligation.
      In such cases, the sale is recognized when the customer is invoiced upon
      completion of the installation, and the customer deposit is applied against
      the
      amount due.





Cash
      and
      cash equivalents:





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





Inventories:





Inventory
      consists of new and used furniture and equipment primarily used in the banking
      industry. Inventories are stated at the lower of cost or market utilizing the
      first-in, first-out method. The Company reviews the inventory quarterly for
      obsolescence, and estimates an allowance. The allowance for obsolete inventory
      was $35,000 as of May 31, 2006 and 2005.





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.





Reclassifications:





Certain
      reclassifications have been made to the 2005 financial statements to conform
      to
      the 2006 financial statement presentation. These reclassifications had no effect
      on the statement of operations.





Advertising:





Advertising
      expenses are considered non-response costs and are expensed as incurred. Total
      advertising expense was $16,267 in 2006 and $11,383 in 2005.





F-7




**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
      were
      issued during the period. The Company considered the reserve shares described
      in
      Note 8 as potentially dilutive common shares outstanding during the years ended
      May 31, 2006 and 2005. The weighted average numbers of shares for determining
      basic earnings per share were 14,947,281 and 14,947,215 in 2006 and 2005,
      respectively. The weighted average numbers of shares for determining diluted
      earnings per share were 15,269,281 and 15,269,215 in 2006 and 2005,
      respectively.





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. See Note 6.





**NOTE
      2 - EQUIPMENT AND IMPROVEMENTS:**





Equipment
      and improvements consist of the following:





Range
                ofEstimatedUseful
                Lives
            
            2006
            
            2005Machinery
                and equipment
            
            
            3
                to 10 years
            
            $
            57,441
            
            $
            50,455Transportation
                equipment
            
            
            5
                years
            
            
            163,396
            
            
            173,232Computer
                equipment
            
            
            5
                years
            
            
            22,392
            
            
            19,787Furniture
                and fixtures
            
            
            5
                years
            
            
            1,267
            
            
            1,267Leasehold
                improvements
            
            
            3
                years
            
            
            51,028
            
            
            48,475Totals
            
            
            
            
            
            295,524
            
            
            293,216Less
                accumulated depreciation and amortization
            
            
            
            
            
            200,658
            
            
            187,461Totals
            
            
            
            
            $
            94,866
            
            $
            105,755





Depreciation
      and amortization amounted to $25,532 and $28,664 for the years ended May 31,
      2006 and 2005 respectively.





F-8




**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
      3 - NOTE PAYABLE TO 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 7, 2006. At May 31, 2006,
      the Company has no outstanding borrowings under the line.





**NOTE
      4 - LONG-TERM DEBT:**





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


2006
            
            20058.25%
                notes, payable in monthly installments of $336, including interest
                and
                maturing July 2005
            
            
            -
            
            
            6847%
                notes, payable in monthly installments of $357, including interest
                and
                maturing October 2005
            
            
            -
            
            
            1,7528%
                notes, payable in monthly installments of $239, including interest
                and
                maturing June 2005
            
            
            -
            
            
            2706%
                notes, payable in monthly installments of $307, including interest
                and
                maturing July 2006
            
            
            910
            
            
            4,4196.5%
                notes, payable in monthly installments of $310, including interest
                and
                maturing September 2007
            
            
            4,740
            
            
            8,0356%
                notes, payable in monthly installments of $283, including interest
                and
                maturing September 2007
            
            
            4,347
            
            
            7,387Totals
            
            
            9,997
            
            
            22,547Less
                current portion
            
            
            8,454
            
            
            12,497Long-term
                portion
            
            
            1,543
            
            
            10,050




Principal
      amounts due under the above obligations in each of the years subsequent to
      May
      31, 2006 are $1,543 in 2007.





F-9




**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
      5 - RELATED PARTY NOTE AND ACCRUED COMPENSATION:**





The
      president and principal stockholder has an employment contract with the Company,
      renewable annually. The contract provides for an annual salary of $78,500 plus
      health insurance and other benefits. The Company has accrued compensation of
      $254,400 and $231,000 through May 31, 2006 and 2005, respectively, related
      to
      this contract.





The
      Company owes the president and principal stockholder for equipment and cash
      advances $207,991 as of May 31, 2006 and 2005. In prior periods this was
      accounted for as non-interest bearing advances. In the fourth quarter of 2005,
      this was converted to a demand promissory note with interest accruing at prime
      plus 0.5% per annum. The president and principal stockholder has forgiven any
      claim for interest prior to converting the advances to a note payable. Interest
      paid or accrued was approximately $15,507 for fiscal year ending May 31, 2006.
      The president and principal stockholder has represented that he will not demand
      repayment of the note until the Company has sufficient resources to make the
      repayment.





**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:





2006
            
            2005Expected
                provision at Federal statutory rate
            
            
            34
            %
            
            (34
            %)Effect
                of state taxes, net of Federal income tax effect
            
            
            6
            
            
            (6
            )Utilization
                of deferred tax assets
            
            
            -
            
            
            40Decrease
                in deferred tax valuation
            
            
            (40
            )
            
            -Effective
                tax rate
            
            
            --
            %
            
            --
            %





Due
      to
      the uncertainties related to the extent and timing of our future taxable income, we
      have
      established a total valuation allowance against deferred tax assets in prior
      periods. In 2006, we decreased the valuation allowance in an amount equivalent
      to current income tax expense. The Company offset the current income tax
      expense of approximately $19,636 by an equivalent decrease in the valuation
      allowance as of May 31, 2006.


F-10


**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
      6 - INCOME TAXES (concluded):**


Significant
      components of the Company's deferred tax assets as of May 31, 2006 and 2005
      are
      as follows:





2006
            
            2005Deferred
                tax assets:Net
                operating loss carryforwards
            
            $
            -
            
            $
            2,000Accrued
                officer salary
            
            
            102,000
            
            
            93,000Depreciation
            
            
            (4,000
            )
            
            (24,000
            )Inventory
                reserve
            
            
            14,000
            
            
            13,000Other
            
            
            3,000
            
            
            12,000115,000
            
            
            96,000Valuation
                allowance for deferred tax assets
            
            
            (95,364
            )
            
            (96,000
            )Deferred
                tax assets
            
            $
            19,636
            
            $
            --




**NOTE
      7 - LEASE OBLIGATIONS - RELATED PARTY:**





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 2007, respectively.





Related
      rent expense amounted to $86,400 for the years ended May 31, 2006 and 2005.





**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, 2006, Taurus has failed to turn over the balance of money, provide the
      names
      of the stock subscribers and the number of shares of common stock purchased.





F-11




**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**






**NOTE
      8 - CONTINGENCIES (CONTINUED):**





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





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





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, 2006, the Company has reserved 322,000 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.  Effective
      May 19, 2006, the Manatee County Circuit Court in Brandenton, Florida
      dismissed the action pending against The Banker's Store, Inc. (the
      "Company"), B.G. Banking Equipment, Inc., and Paul D. Clark for failure to
      prosecute.




F-12





**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 that 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.





Concentrations
      of credit risk:





Financial
      instruments that 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 the
      Federal Deposit Insurance Corporation insured limits. At May 31, 2006, the
      Company has cash and cash equivalent balances that exceed federally insured
      limits in the amount of approximately $41,692.





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.




**NOTE
      9 - FAIR VALUE OF FINANCIAL INSTRUMENTS:**





The
      Company's material financial instruments at May 31, 2006 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 the carrying value of the
      advances approximates fair value.


F-13


**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**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"). 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.





Segment
      disclosure information follows:




**THE
      BANKER'S STORE, INC. AND SUBSIDIARIES**





**DISCLOSURE
      OF REPORTED SEGMENT PROFIT OR LOSS, AND SEGMENT ASSETS**




**TWELVE
                MONTHS ENDED**
            
            **TWELVE
                MONTHS ENDED****MAY
                31, 2006**
            
            **MAY
                31, 2005****Banking**
            
            **Office**
            
            
            
            **Banking**
            
            **Office****Equipment**
            
            **Equipment**
            
            **Totals**
            
            **Equipment**
            
            **Equipment**
            
            **Totals**Revenues
                from external customers
            
            $
            2,191,196
            
            $
            264,819
            
            $
            2,456,015
            
            $
            2,572,248
            
            $
            306,463
            
            $
            2,878,711Interest
                revenue
            
            
            3,404
            
            
            -
            
            
            3,404
            
            
            669
            
            
            -
            
            
            669Interest
                expense
            
            
            17,114
            
            
            -
            
            
            17,114
            
            
            2,260
            
            
            -
            
            
            2,260Net
                interest expense
            
            
            13,710
            
            
            -
            
            
            13,710
            
            
            1,591
            
            
            -
            
            
            1,591Depreciation
                and amortization
            
            
            25,222
            
            
            311
            
            
            25,532
            
            
            28,298
            
            
            366
            
            
            28,664Segment
                profit (loss)
            
            
            67,837
            
            
            (9,274
            )
            
            58,563
            
            
            106,12
            
            
            1
                (5,060
            )
            
            101,061Segment
                assets
            
            $
            1,356,098
            
            $
            104,189
            
            $
            1,460,287
            
            $
            1,368,461
            
            $
            158,588
            
            $
            1,527,049




**NOTE
      11 - SUMMARIZED QUARTERLY FINANCIAL DATA (** ***Unaudited*** **)**


The
      following data summarizes quarterly operating results.





**Year
                ended May 31, 2006**August
                31,
            
            November
                30,
            
            February
                28
            
            May
                31,2005
            
            2005
            
            2006
            
            2006
            
            TotalsRevenues
            
            $
            568,360
            
            $
            738,278
            
            $
            616,867
            
            $
            532,510
            
            $
            2,456,015Cost
                of goods sold
            
            
            414,330
            
            
            396,771
            
            
            500,714
            
            
            350,745
            
            
            1,662,560Gross
                profit
            
            
            154,030
            
            
            341,507
            
            
            116,153
            
            
            181,765
            
            
            793,455Selling,
                general and administrative expenses
            
            
            199,689
            
            
            198,732
            
            
            160,738
            
            
            166,108
            
            
            725,267Income
                (loss) from operations
            
            
            (45,659
            )
            
            142,775
            
            
            (44,585
            )
            
            15,657
            
            
            68,188Other
                income (expense)
            
            
            590
            
            
            (7,269
            )
            
            (2,940
            )
            
            (6
            )
            
            (9,625
            )Income
                before income tax provision
            
            
            (45,069
            )
            
            135,506
            
            
            (47,525
            )
            
            15,651
            
            
            58,563Income
                tax provision
            
            
            -
            
            
            33,690
            
            
            (18,052
            )
            
            (15,638
            )
            
            -Net
                income (loss)
            
            
            (45,069
            )
            
            101,816
            
            
            (29,473
            )
            
            31,289
            
            
            58,563Basic
                earnings (loss) per common share
            
            $
            -
            
            $
            0.01
            
            $
            (0.01
            )
            $
            -
            
            $
            -Diluted
                earnings (loss) per common share
            
            $
            -
            
            $
            0.01
            
            $
            (0.01
            )
            $
            -
            
            $
            -




F-14




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





Effective
      May 28, 2005, J.H. Cohn LLP ("JH Cohn") notified the board of directors of
      The
      Banker's Store, Inc. (the "Company") of its resignation as the Company's
      independent registered accounting firm which resignation the Company's board
      of
      directors accepted on that same date.




Effective
      May 31, 2005, the Company engaged Marmann McCrary & Associates ("Marmann")
      as its new independent registered accounting firm. During the two most recent
      fiscal years and the interim period preceding the engagement of Marmann, the
      Company has not consulted with Marmann regarding any of the matters set forth
      in
      Item 304(a)(2)(i) or (ii) of Regulation S-B.




**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, 2006.





(b)
      Internal controls. During the year ended May 31, 2006, 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 3, 2006. 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*.





10




NAME
            
            AGE
            
            POSITIONPaul
                D. Clark**
            
            63
            
            President,
                Director, and Chief Executive Officer(Principal
                Accounting and Financial Officer)Roberta
                Clark**
            
            62
            
            Secretary
                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.





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 or a Chief Financial Officer.
      Paul Clark serves as our principal accounting and financial officer in addition
      to his duties as CEO and President. 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.


11




SUMMARY
      COMPENSATION
      TABLE






NAME
                AND PRINCIPAL POSITION
            
            YEAR
            
            ANNUAL
                COMPENSATIONPaul
                D. Clark
            
            2006
            
            $78,500CEO,
                CFO and
            
            2005
            
            $78,500President
            
            2004
            
            $78,500Roberta
                W. Clark
            
            2006
            
            $25,389Secretary
            
            2005
            
            $25,3892004
            
            $25,389





Mr.
      Clark's annual contract was for $78,500 in fiscal 2004, $78,500 in fiscal 2005
      and $78,500 in fiscal 2006. In each of these years and in prior years, a portion
      of Mr. Clark's salary was deferred. In addition, Mr. Clark has from time to
      time
      advanced amounts on behalf of the Company for which the Company has issued
      to
      Mr. Clark a promissory note. The Company presently owes Mr. Clark $207,991
      for
      cash advanced for inventory and $254,400 in deferred compensation. No other
      executive officer was compensated in excess of $100,000 for the past three
      (3)
      fiscal years.





**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.





**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 $78,500 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 any one 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 $78,500.





**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 12,
      2006, 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:





NAME
                AND ADDRESS
            
            SHARES
                BENEFICIALLY OWNED
            
            PERCENTAGEPaul
                D. Clark & Roberta W. Clark
            
            13,263,630
            
            88.70%1985
                Claypool Alvaton RdBowling
                Green, Kentucky 42101





Paul
      and
      Roberta are husband and wife, together they have voting and investment power
      of
      these shares.





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 $86,400 for the fiscal years ended May 31, 2006 and
      2005, respectively.


The
        Banker's Store owed Mr. Clark an aggregate sum of $462,391 as of May 31,
        2006.
        This amount consisted primarily of inventory purchased from Mr. Clark in
        May
        1999 and compensation accrued but not paid.


12




**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
            Certification
                Pursuant to Rule 13a-14(a) of Paul Clark (CEO &
                CFO)





32
            Certification
                of Paul Clark (CEO & CFO)





(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 2006**





During
      the fiscal year ended May 31, 2006, we were billed and paid Marmann, McCrary
      & Assoc. PC, our principal accountant for the audit of our annual financial
      statements and review of our quarterly financial statements,
      $44,945.





**AUDIT
      FEES FOR FISCAL YEAR 2005**





During
      the fiscal year ended May 31, 2005, 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, $58,816.





**TAX
      FEES**





During
      the fiscal years ended May 31, 2006, we were billed and paid Marmann, McCrary
      & Assoc. PC $5,700 for tax preparation work.





During
      the fiscal years ended May 31, 2005, we were billed and paid J.H. Cohn $8,651
      for tax preparation work.





13




**SIGNATURES**





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





**The
                Banker's Store, Inc.**Dated:
                August 29, 2006
            By:
            /s/
                Paul D. ClarkPaul
              D. Clark,President,
              CEO,CFO
              & Director




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 29, 2006Paul
                D. Clark President, CEO, CFO, & Director/s/
                Roberta Clark
            Dated:
                August 29, 2006Roberta
                Clark Secretary & Director






14