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


                                    FORM 10-Q


           (X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

                       For the quarter ended June 30, 2004


           ( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _________to_________


                           Commission File No. 0-12374


                                  EQUITEX, INC.
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)



Delaware                                                              84-0905189
--------------------------------                                     -----------
(State or other jurisdiction of                                    (IRS Employer
incorporation or organization)                               Identification No.)


                            7315 East Peakview Avenue
                            Englewood, Colorado 80111
                -------------------------------------------------
               (Address of principal executive offices) (Zip code)


                                 (303) 796-8940
                -------------------------------------------------
               (Registrant's telephone number including area code)



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Number of shares of common stock outstanding at August 20, 2004: 34,187,649

<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES


PART I   FINANCIAL INFORMATION                                            Page
                                                                          ----

         Item 1.  Financial statements:

                     Report of Independent Registered Public
                  Accounting Firm                                            3

                  Condensed consolidated balance sheets -
                  June 30, 2004 (unaudited)
                  and December 31, 2003                                  4 - 5

                  Condensed consolidated statements of operations-
                  three and six months ended June 30, 2004
                  and 2003(unaudited)                                        6

                  Condensed consolidated statement of changes
                  in stockholders' equity - six months ended
                  June 30, 2004 (unaudited)                              7 - 8

                  Condensed consolidated statements of cash flows
                  - six months ended June 30, 2004
                  and 2003 (unaudited)                                  9 - 10

                  Notes to condensed consolidated
                  financial statements                                 11 - 24

         Item 2.  Management's discussion and analysis of financial
                  condition and results of operations                  25 - 32

         Item 3.  Quantitative and qualitative disclosures
                  of market risk                                            33

         Item 4.  Disclosure controls and procedures                        34

PART II    OTHER INFORMATION

         Item 1.  Legal proceedings                                         34

         Item 2.  Changes in securities and use of proceeds                 34

         Item 3.  Defaults upon senior securities                           34

         Item 4.  Submission of matters to a vote of security holders       34

         Item 5.  Other information                                         34

         Item 6.  Exhibits and reports on Form 8-K                          34

                  Signature                                                 35

                                        2
<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
Equitex, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of
Equitex, Inc. and subsidiaries as of June 30, 2004, the related condensed
consolidated statements of operations for the three-month and six-month periods
ended June 30, 2004 and 2003, the related condensed consolidated statement of
changes in stockholders' equity for the six-month period ended June 30, 2004,
and the related condensed consolidated statements of cash flows for the
six-month periods ended June 30, 2004 and 2003. These interim financial
statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance
sheet of Equitex, Inc. and subsidiaries as of December 31, 2003, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated April 13,
2004 (which includes an explanatory paragraph relating to the adoption of
Statement of Financial Accounting Standards No. 141, BUSINESS COMBINATIONS and
Statement of Financial Accounting Standards No. 142, GOODWILL AND OTHER
INTANGIBLE ASSETS), we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 2003, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.



/s/ GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
August 20, 2004

                                        3
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS



<TABLE>
<CAPTION>
                                                                 June 30,     December 31,
                                                                   2004           2003
                                                                -----------   ------------
                                                                (Unaudited)
<S>                                                             <C>           <C>
Current assets:
  Cash and cash equivalents                                     $ 6,872,245   $ 8,059,780
  Receivables, net                                                2,182,082     3,509,120
  Current portion of notes and interest receivable,
    including related parties of $0 (2004) and
    $239,206 (2003)                                                  66,973       707,155
  Prepaid expenses and other                                        505,135       314,372
  Assets of discontinued operations                                     233         1,055
                                                                -----------   -----------
   Total current assets                                           9,626,668    12,591,482
                                                                -----------   -----------

Notes and interest receivable, net, including related
   parties of $1,764,060 (2004) and $1,462,375 (2003)             4,759,002     2,107,062
Property, equipment and leaseholds, net                           1,217,382     1,184,813
Deferred tax asset                                                              1,380,000
Intangible and other assets, net                                  3,443,967     3,358,393
Goodwill                                                          5,636,000     5,636,000
                                                                -----------   -----------
                                                                 16,436,351    13,666,268
                                                                -----------   -----------
                                                                $24,683,019   $26,257,750
                                                                ===========   ===========
</TABLE>

                                   (Continued)

                                        4
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                            June 30,       December 31,
                                                                              2004            2003
                                                                          ------------    -------------
                                                                           (Unaudited)
<S>                                                                       <C>             <C>
Current liabilities:
  Bank overdraft                                                                          $  2,497,766
  Accounts payable                                                        $    565,156         651,106
  Accrued expenses and other liabilities, including related
    party accruals of $669,279 (2004) and $1,293,360 (2003)                  2,285,109       2,722,986
  Accrued liabilities on casino contracts                                      528,636         587,099
  Current portion of long-term debt                                          1,139,900         201,727
  Notes and loans payable, including related party notes of
    $14,344 (2004) and $155,421 (2003)                                      10,417,021      11,432,598
  Due to credit card holders                                                   237,364         275,499
  Liabilities of discontinued operations                                       589,876         621,768
                                                                          ------------    ------------
   Total current liabilities                                                15,763,062      18,990,549
                                                                          ------------    ------------
  Long-term debt, net of current portion                                     3,544,602          37,243
                                                                          ------------    ------------
   Total liabilities                                                        19,307,664      19,027,792
                                                                          ------------    ------------
Minority interest                                                              253,343             -
                                                                          ------------    ------------
Commitments and contingencies

Stockholders' equity:
  Preferred stock; 2,000,000 shares authorized:
    Series D, 6%; stated value $1,000 per share; 408 shares issued
     and outstanding; liquidation preference of $602,000                       408,000         408,000
    Series G, 6%; stated value $1,000 per share; 370 shares
     issued and outstanding; liquidation preference of $590,000                370,000         370,000
    Series I, 6%; stated value $1,000 per share; 1,600 shares issued
     and outstanding; liquidation preference of $2,406,000                   1,600,000       1,600,000
  Common stock, $0.02 par value; 50,000,000 shares authorized;
     35,061,646 (2004) and 34,530,040 (2003) shares issued;
     34,125,578 (2004) and 33,167,972 (2003) shares outstanding                701,233         690,601
  Stock subscription receivable                                               (350,000)       (800,000)
  Additional paid-in capital                                                18,525,399      17,115,338
  Accumulated deficit                                                      (15,538,715)    (11,428,264)
  Less treasury stock at cost; 937,068 shares (2004) and
   1,362,068 shares (2003)                                                    (593,905)       (725,717)
                                                                          ------------    ------------
    Total stockholders' equity                                               5,122,012       7,229,958
                                                                          ------------    ------------
                                                                          $ 24,683,019    $ 26,257,750
                                                                          ============    ============
</TABLE>
            See notes to condensed consolidated financial statements.

                                                      5
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                              Three months ended June 30,     Six months ended June 30,
                                                                 2004            2003            2004            2003
                                                             ------------    ------------    ------------    ------------
<S>                                                          <C>             <C>             <C>             <C>
Fee revenue                                                  $  3,458,260    $  4,545,486    $  6,921,363   $   9,119,437
Credit card income, net of provision for losses                    66,467         116,741         145,178         245,790
                                                             ------------    ------------    ------------    ------------
       Total revenues                                           3,524,727       4,662,227       7,066,541       9,365,227
                                                             ------------    ------------    ------------    ------------

Fees paid to casinos                                            1,209,052       1,539,844       2,375,200       3,048,086
Salaries, wages and employee benefits                           1,302,041       1,691,958       2,697,331       3,317,571
Third party servicing fees                                         39,498          64,655          82,109         139,404
Other operating and corporate expenses                          2,727,023       1,478,529       4,035,894       2,895,828
                                                             ------------    ------------    ------------    ------------
                                                                5,277,614       4,774,986       9,190,534       9,400,889
                                                             ------------    ------------    ------------    ------------
Loss from operations                                           (1,752,887)       (112,759)     (2,123,993)        (35,662)
                                                             ------------    ------------    ------------    ------------
Other income (expense):
Interest income, including related party interest for the
  three months of $38,617 (2004) and $12,893 (2003) and
  $65,073 (2004) and $23,949 (2003) for the six months             88,614          17,900         173,544          32,342
Interest expense, including related party interest for the
 three months of $5,679 (2004) and $3,630 (2003) and
  $1,926 (2004) and $7,212 (2003) for the six months             (486,481)       (338,836)       (822,013)       (695,552)
                                                             ------------    ------------    ------------    ------------
                                                                 (397,867)       (320,936)       (648,469)       (663,210)
                                                             ------------    ------------    ------------    ------------
Loss from continuing operations before income taxes
  and minority interest                                        (2,150,754)       (433,695)     (2,772,462)       (698,872)
Deferred income tax expense                                    (1,380,000)                     (1,380,000)
Current income tax expense                                                        (12,000)         (6,000)        (24,000)
                                                             ------------    ------------    ------------    ------------
Loss before minority interest                                  (3,530,754)       (445,695)     (4,158,462)       (722,872)
Minority interest                                                  53,740                          53,740
                                                             ------------    ------------    ------------    ------------
Loss from continuing operations                                (3,477,014)       (445,695)     (4,104,722)       (722,872)
Loss from discontinued operations                                  (2,425)         (7,455)         (5,729)        (36,968)
                                                             ------------    ------------    ------------    ------------
Net loss                                                       (3,479,439)       (453,150)     (4,110,451)       (759,835)
Warrant accretion                                                  (1,350)         (3,330)         (4,640)         (6,620)
Redemption of convertible preferred stock in excess
  of beneficial conversion features                                                                                38,430
Deemed preferred stock dividends                                  (57,000)        (57,000)       (111,800)       (119,500)
                                                             ------------    ------------    ------------    ------------
Net loss applicable to common stockholders                   $ (3,537,789)   $   (513,480)   $ (4,226,891)   $   (847,525)
                                                             ============    ============    ============    ============
Basic and diluted net loss per common share:
  Loss from continuing operations                            $      (0.10)   $      (0.02)   $      (0.13)   $      (0.03)
  Loss from discontinued operations                                     *               *               *               *
                                                             ------------    ------------    ------------    ------------
Basic and diluted loss per share                             $      (0.10)   $      (0.02)   $      (0.13)   $      (0.03)
                                                             ============    ============    ============    ============

Weighted average number of common shares outstanding,
  basic and diluted                                            33,992,017      29,146,557      33,797,693      28,577,480
                                                             ============    ============    ============    ============
</TABLE>
* Amount is less than $(0.01) per share

            See notes to condensed consolidated financial statements.

                                        6
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                         SIX MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                   Convertible preferred stock      Stock            Common stock
                                                    --------------------------   subscription   -------------------------
                                                      Shares          Amount      receivable       Shares        Amount
                                                    -----------    -----------    -----------   -----------   -----------
<S>                                                 <C>            <C>            <C>           <C>           <C>
Balances, January 1, 2004                                 2,378    $ 2,378,000    $ (800,000)    34,530,040   $   690,601

Exercises of options and warrants for common
  stock                                                                                             531,606        10,632

Warrants issued for services preformed in
  connection with convertible promissory notes

Warrants attached to convertible promissory notes

Purchase by subsidiary of 103,500 shares of
  common stock

Conversion of accounts payable for common stock
  previously issued as contingent consideration

Proceeds received on stock subscription receivable                                   200,000

Sale of 483,500 shares of treasury stock for cash

Distribution of 45,000 shares of treasury stock
  for services

Conversion of note payable for subsidiary
  common stock

Beneficial conversion feature on convertible
  promissory note

Cancellation of portion of stock subscription
  receivable                                                                         250,000

Issuance of subsidiary warrants for services

Acquisition of SVI in exchange for subsidiary
  common stock

Net loss
                                                    -----------    -----------    -----------   -----------   -----------
Balances, June 30, 2004                                   2,378    $ 2,378,000    $ (350,000)    35,061,646   $   701,233
                                                    ===========    ===========    ===========   ===========   ===========
</TABLE>
                                   (Continued)

                                        7
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

                         SIX MONTHS ENDED JUNE 30, 2004

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   Additional                     Total
                                                     Treasury       paid-in       Accumulated   stockholders'
                                                      stock         capital         deficit       equity
                                                    -----------    -----------   ------------   -----------
<S>                                                 <C>            <C>           <C>            <C>
Balances, January 1, 2004                           $ (725,717)    $17,115,338   $(11,428,264)  $ 7,229,958

Exercises of options and warrants for common
  stock                                                                311,052                      321,684

Warrants issued for services performed in
  connection with convertible promissory notes                         164,700                      164,700

Warrants attached to convertible promissory notes                      392,400                      392,400

Purchase by subsidiary of 103,500 shares of
  common stock                                        (113,625)                                    (113,625)

Conversion of accounts payable for common stock
  previously issued as contingent consideration                         25,647                       25,647

Proceeds received on stock subscription receivable                                                 200,000

Sale of 483,500 shares of treasury stock for cash      223,867         268,165                      492,032

Distribution of 45,000 shares of treasury stock
  for services                                          21,570          29,180                       50,750

Conversion of note payable for subsidiary
  common stock                                                         100,000                      100,000

Beneficial conversion feature on convertible
  promissory note                                                      100,000                      100,000

Cancellation of portion of stock subscription
  receivable                                                          (250,000)

Issuance of subsidiary warrants for services                           576,000                      576,000

Acquisition of SVI in exchange for subsidiary
  common stock                                                        (307,083)                    (307,083)

Net loss                                                                           (4,110,451)   (4,110,451)
                                                    -----------    -----------   -------------   ----------
Balances, June 30, 2004                             $ (593,905)    $18,525,399   $(15,538,715)  $ 5,122,012
                                                    ===========    ===========   =============   ==========
</TABLE>
            See notes to condensed consolidated financial statements.

                                        8
<PAGE>

                                 EQUITEX, INC. AND SUBSIDIARIES

                        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                            SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                          (UNAUDITED)
<TABLE>
<CAPTION>

                                                                             2004            2003
                                                                          -----------    -----------
<S>                                                                       <C>            <C>
Cash flows used in operating activities from continuing operations:
    Net loss                                                              $(4,110,451)   $  (759,835)
                                                                          -----------    -----------
Adjustments to reconcile net loss to net cash used in operating
  activities from continuing operations:
    Deferred income taxes                                                   1,380,000
    Loss from discontinued operations                                           5,729         36,968
    Provision for (recovery of) losses                                        145,650       (174,222)
    Depreciation and amortization                                             577,874        539,567
    Amortization of discount on convertible promissory notes                   31,856
    Stock-based compensation expense                                          626,750        277,000
    Beneficial conversion feature on convertible promissory note              100,000
    Minority interest                                                         (53,740)
Changes in assets and liabilities:
  Decrease (increase) in accounts receivable                                1,272,031     (1,043,540)
  Decrease (increase) in other receivables                                     36,686       (517,362)
  Increase in interest receivable and other assets                           (311,292)      (192,064)
  Decrease in due to credit card holders                                      (38,135)       (37,241)
  (Decrease) increase in accounts payable and accrued liabilities            (543,337)       809,155
                                                                          -----------    -----------
Total adjustments                                                           3,230,072       (301,739)
                                                                          -----------    -----------
Net cash used in operating activities from continuing
  operations                                                                 (880,379)    (1,061,574)
                                                                          -----------    -----------
Cash flows from investing activities:
  Net decrease (increase) in credit card receivables                           16,671
(10,719)
  Purchases of furniture, fixtures and equipment                             (196,317)
(188,280)
  Issuance of notes receivable, related parties and other                  (2,041,773)      (323,300)
  Repayment of notes receivable, related parties and other                      6,544         72,823
                                                                          -----------    -----------
Net cash used in investing activities from continuing
  operations                                                               (2,214,875)      (449,476)
                                                                          -----------    -----------
Cash flows from financing activities:
  Decrease in bank overdraft                                               (2,497,766)
  Redemption of preferred stock for cash                                                    (100,000)
  Proceeds from the exercise of options and warrants                          172,722        215,416
  Purchase of Equitex shares for treasury by subsidiary                      (113,625)      (207,000)
  Increase in deferred loan costs                                            (335,000)
  Issuance of notes payable, related parties and other                      6,612,000        770,000
  Repayment of notes payable, related parties and other                    (2,585,845)    (1,495,062)
  Repayment of stock subscription receivable
200,000
  Sale of treasury stock for cash                                             492,032        147,794
                                                                          -----------    -----------
Net cash provided by (used in) financing activities from continuing
  operations                                                                1,944,518       (668,852)
                                                                          -----------    -----------
Net cash used in discontinued operations                                      (36,799)      (144,858)
                                                                          -----------    -----------
</TABLE>
                                   (Continued)

                                        9
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              2004            2003
                                                                           -----------    -----------
<S>                                                                         <C>            <C>
Decrease in cash and cash equivalents                                       (1,187,535)    (2,324,760)
Cash and cash equivalents, beginning                                         8,059,780      8,926,124
                                                                           -----------    -----------
Cash and cash equivalents, ending                                          $ 6,872,245    $ 6,601,364
                                                                           ===========    ===========

Supplemental disclosure of cash flow information:

 Cash paid for interest                                                    $   723,003    $   714,294
                                                                           ===========    ===========

 Cash paid for income taxes                                                $    26,989
                                                                           ===========

Supplemental disclosure of non-cash investing and financing activities:

  Warrants issued in connection with convertible promissory
   notes                                                                   $   557,100
                                                                           ===========
  Conversion of accounts payable for common stock previously
   issued as contingent consideration                                      $    25,647
                                                                           ===========
  Conversion of note payable and accrued interest in exchange for
   exercise of warrants                                                    $   148,962
                                                                           ===========
  Cancellation of portion of stock subscription receivable                 $   250,000
                                                                           ===========
  Conversion of note payable in exchange for issuance of subsidiary
   common stock                                                            $   100,000
                                                                           ===========

  Conversion of preferred stock to common stock                                           $ 1,485,000
                                                                                          ===========
  Conversion of accounts payable to common stock                                          $   180,954
                                                                                          ===========
  Equipment exchanged for a reduction in a note payable included
   in discontinued operations                                                             $    12,640
                                                                                          ===========
</TABLE>
            See notes to condensed consolidated financial statements.

                                       10
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION AND
     RECENT EVENTS:

     INTERIM FINANCIAL STATEMENTS:

     The condensed consolidated interim financial statements of Equitex, Inc.
       and subsidiaries (the "Company") for the three and six month periods
       ended June 30, 2004 and 2003, have been prepared by the Company without
       audit by the Company's independent auditors. In the opinion of the
       Company's management, all adjustments necessary to present fairly the
       financial position, results of operations, and cash flows of the Company
       as of June 30, 2004, and for the periods ended June 30, 2004 and 2003,
       have been made. Except as described below, those adjustments consist only
       of normal and recurring adjustments.

     Certain information and note disclosures normally included in the Company's
       annual financial statements prepared in accordance with accounting
       principles generally accepted in the United States of America have been
       condensed or omitted. These condensed consolidated financial statements
       should be read in conjunction with a reading of the consolidated
       financial statements and notes thereto included in the Company's Form
       10-K annual report filed with the Securities and Exchange Commission
       ("SEC") on April 14, 2004. The results of operations for the six months
       ended June 30, 2004, are not necessarily indicative of the results to be
       expected for the full year.

     ORGANIZATION:

     ACQUISITION OF CHEX BY SVI AND BASIS OF PRESENTATION:

     Effective June 7, 2004, the Company executed an Agreement and Plan of
       Merger (the "Merger Agreement") with Seven Ventures, Inc. ("SVI") to
       merge its wholly-owned subsidiary Chex Services, Inc. ("Chex") into a
       wholly-owned subsidiary of SVI (the "Merger Subsidiary"), where upon the
       separate corporate existence of the Merger Subsidiary ceased. Under the
       terms of the Merger Agreement, Equitex exchanged 100% of its equity
       ownership in Chex for 7,700,000 shares of SVI, representing 93% of SVI's
       outstanding common stock following the transaction (subsequently reduced
       to 82.9% through subsidiary conversion of debt to equity). In addition,
       Equitex received warrants to purchase 800,000 shares of SVI common stock
       at an exercise price of $0.10 per share, expiring five years from the
       date of closing. As a result, Chex became a wholly-owned subsidiary of
       SVI, a publicly-traded shell company. On June 29, 2004, SVI changed its
       name to FastFunds Financial Corporation ("FFFC"). In addition, under the
       terms of the Merger Agreement, a bridge loan was consummated with an
       international merchant bank, whereby SVI received $400,000 through the
       issuance of a convertible promissory note. The promissory note is
       convertible into 4,000,000 shares of SVI common stock upon the occurrence
       of certain future events (Note 6).

     Of the warrants received by Equitex, 640,000 were subsequently transferred
       to officers, directors and a consultant of Equitex and Chex. The warrants
       were determined to have a fair value of $1.00 at the date of the grant,
       resulting in $576,000 of compensation expense during the three months
       ended June 30, 2004.

                                       11
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION AND
     RECENT EVENTS (CONTINUED):

     ORGANIZATION (CONTINUED):

     The accompanying financial statements present the consolidated financial
       position of Equitex and its subsidiaries, FFFC, Chex, and its
       wholly-owned subsidiary Collection Solutions, Inc. ("Collection"), Key
       Financial Systems, Inc. ("Key"), Nova Financial Systems, Inc. ("Nova"),
       and Denaris Corporation ("Denaris"). Minority interest at June 30, 2004
       represents the 17.1% minority ownership of FFFC. Minority interest
       reflected in the Company's statement of operations for the three and six
       months ended June 30, 2004 represents net losses of FFFC allocated to the
       minority common stockholders for the period from June 7, 2004 through
       June 30, 2004. The excess of the losses for the three and six months
       ended June 30, 2004 and 2003 applicable to the minority interest of
       Denaris have been charged to the Company, and no minority interest is
       reflected in the Company's June 30, 2004 or December 31, 2003,
       consolidated financial statements for Denaris. All significant
       intercompany accounts and transactions have been eliminated in
       consolidation.

     RECENT EVENTS:

     CHEX RECENT EVENTS:

     In November 2003, the Company executed a Stock Purchase Agreement (the
       "SPA") with iGames Entertainment, Inc. ("iGames"), a publicly-traded
       Nevada Corporation. Pursuant to the SPA, Chex was to have been sold to
       iGames by Equitex in exchange for 62.5% of iGames' common stock and other
       consideration. In March 2004, the Company notified iGames that it was
       terminating the SPA due to various material unrelated adverse events that
       have impacted the business of iGames. The Company and iGames have each
       filed legal actions against each other, whereby each is seeking the
       $1,000,000 termination fee, as defined in the SPA, plus damages, pursuant
       to the SPA. In addition, the Company declared a default under a
       $2,000,000 term loan made by Chex to iGames in January 2004 (Note 7).

     In January 2004, Chex received a termination notice from Native American
       Cash Systems Florida, Inc. ("NACSF"), terminating Chex's December 2001
       contract to provide cash access services at five Seminole Tribe casino
       properties located throughout Florida. The loss of this contract, which
       provided approximately $4,000,000 of Chex's revenue for the year ended
       December 31, 2003, resulted in Chex immediately implementing cost savings
       measures.

     DENARIS RECENT EVENTS:

     In August 2004, the Company along with its majority owned subsidiary,
       Denaris, executed a non-binding letter of intent to acquire Digitel
       Network Corporation, Platinum Benefit Group, Inc., National Business
       Communications, Inc., Personal Voice, Inc. and Private Voice, Inc.
       (collectively the "Companies") all based in Clearwater, Florida. The
       Companies design, develop and market stored value card programs as well
       as personal voice mail products through their call center operations. In
       conjunction with their stored value card products, the Companies offer
       the Platinum Benefit Group premium service that includes vehicle roadside
       assistance, a prescription discount program, a dental care discount
       program, a registered nurse hotline and a family legal plan. The
       Companies also offer personal voice mail services through Personal Voice,
       Inc. and Private Voice, Inc. Completion of this transaction is subject to
       further due diligence by both parties, negotiation and execution of a
       definitive agreement, necessary state or federal regulatory approvals,
       board of director approval and any necessary stockholder approvals.

                                       12
<PAGE>
                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION AND
     RECENT EVENTS (CONTINUED):

     RECENT EVENTS (CONTINUED):

     DENARIS RECENT EVENTS (CONTINUED):

     In addition, in August 2004 the Company along with its majority owned
       subsidiary, Denaris, executed a non-binding letter of intent to enter
       into a joint venture agreement with Financial Freedom International
       ("FFI") of Orem, Utah to distribute Denaris' stored value card and
       payroll card products to its customers. FFI is a provider of educational
       materials, software and services to consumers with troubled debt. Their
       products and services help people in financial crisis avoid bankruptcy,
       improve credit rating and reduce their debt to manageable levels.
       Completion of this transaction is subject to further due diligence by
       each party, negotiation and execution of a definitive agreement, and
       other customary pre-closing conditions.

     AGREEMENT WITH PAYMASTER JAMAICA:

     In August 2002, the Company entered into a binding agreement with Paymaster
       (Jamaica) Limited ("Paymaster Jamaica") to form a jointly-owned and
       operated company to replicate Paymaster Jamaica's financial services
       business model throughout the Caribbean, North America and ultimately,
       worldwide. This newly-formed company was to be named Paymaster Worldwide,
       Inc. ("PWI"). Under the terms of the agreement, the Company advanced
       $500,000 to Paymaster Jamaica that could be converted into stock of PWI
       if the Company was formed by August 15, 2003. Because the Company was not
       formed by this date, the $500,000 advance became a promissory note under
       the terms of the agreement. The note is due in full on August 15, 2008.
       The note bears interest at 6%, is due in bi-annual payments of interest
       only, and is collateralized by shares of Paymaster Jamaica stock
       sufficient to represent on a fully diluted basis, a 20% ownership
       interest in Paymaster Jamaica. The shares have been pledged by the
       President of Paymaster Jamaica. As of June 30, 2004, PWI had not yet been
       formed. The Company has recorded a valuation allowance of $250,000
       against this receivable at June 30, 2004 and December 31, 2003, due to
       uncertainty as to ultimate collectability.

     Paymaster Jamaica, headquartered in Kingston, Jamaica, commenced operations
       in 1997, and offers revenue collection and customer care to businesses,
       institutions and consumers on the island of Jamaica. It offers its
       customers an alternative to retaining their own commercial offices. In
       addition, through its bill payment services, Paymaster Jamaica is
       developing cash remittance services, affording its customers the
       convenience to send and receive various types of remittances nationally
       or internationally via cash or debit cards.

     NASDAQ COMPLIANCE:

     In July 2004, the Company received a notice from the NASDAQ Stock Market
       ("NASDAQ") notifying the Company that for the last 30 consecutive trading
       days the price of the Company's common stock closed below $1.00, the
       minimum per share requirement for continued inclusion under a Marketplace
       Rule (the "Rule"). Under the Rule, the Company is provided 180 calendar
       days, or until January 24, 2005, to regain compliance. If at anytime
       before January 24, 2005, the bid price of the Company's common stock
       closes at $1.00 per share or more for a minimum of 10 consecutive trading
       days, the Company is to receive written notification that the Company is
       compliant.

                                       13
<PAGE>
                      EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION AND
     RECENT EVENTS (CONTINUED):

     RECENT EVENTS (CONTINUED):

     NASDAQ COMPLIANCE (CONTINUED):

     If the Company does not meet the required criteria by January 24, 2005, a
       determination is to be made whether the Company meets initial listing
       criteria. If the Company does, it will be granted an additional 180
       calendar days to demonstrate compliance of the $1.00 minimum closing bid
       price for 10 consecutive trading days. Thereafter, if the Company has not
       regained compliance with the second 180 day period, but satisfies the
       initial inclusion criteria, it may be afforded an additional compliance
       period, up to its next shareholder meeting, provided the Company commits
       to (1) seek shareholder approval for a reverse stock split at or before
       its next shareholder meeting and (2) to promptly thereafter effect the
       reverse stock split. The shareholder meeting to seek such approval must
       occur no later than two years from July 28, 2004. If the Company does not
       regain compliance with the Rule and is not eligible for an additional
       compliance period, NASDAQ will provide written notification that the
       Company's securities will be delisted. At that time, the Company may
       appeal Staff's determination to delist its securities to a Listing
       Qualification Panel.

     STOCK OPTIONS:

     The Company applies Accounting Principles Board Opinion No. 25 (APB 25)
       "Accounting for Stock Issued to Employees" and related interpretations in
       accounting for its stock option plans.

     Had compensation cost for stock-based awards issued to employees been
       determined based on the fair values at the grant dates for awards under
       the plans consistent with the fair-value based method of accounting
       prescribed by SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, the
       Company's results would have been changed to the pro forma amounts
       indicated below:

<TABLE>
<CAPTION>
                                                         Three Months Ended               Six Months Ended
                                                    June 30, 2004   June 30, 2003   June 30, 2004   June 30, 2003
                                                    -------------   -------------   -------------   -------------
       <S>                                          <C>             <C>             <C>             <C>
       Net loss                                     $  (3,479,439)  $    (453,150)  $  (4,110,451)   $   (759,835)

       ADD: Stock-based employee compensation
       expense included in reported net income,
       net of related tax effects                         553,000            --           553,000             --

       DEDUCT: Total stock-based employee
       compensation  expense determined under fair
       value based  method for all awards,  net of
       related tax effects                               (560,000)       (484,000)       (560,000)       (484,000)
                                                    -------------   -------------   -------------   -------------
       Pro forma net loss                           $  (3,486,439)  $    (937,150)  $  (4,117,451)  $  (1,243,835)
                                                    =============   =============   =============   =============

       Net loss per share:

       Basic and diluted - as reported              $       (0.10)  $       (0.02)  $       (0.13)  $       (0.03)
                                                    =============   =============   =============   =============
       Basic and diluted -  proforma                $       (0.10)  $       (0.03)  $       (0.13)  $       (0.05)
                                                    =============   =============   =============   =============
</TABLE>

                                       14
<PAGE>
                       EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

1.   INTERIM FINANCIAL STATEMENTS, ORGANIZATION AND BASIS OF PRESENTATION AND
     RECENT EVENTS (CONTINUED):

     STOCK OPTIONS (CONTINUED):

     In July 2004, the Company granted 1,590,000 options to various employees
       for services. The options were granted with exercise prices equal to the
       quoted market price at the date of the grant and expire in July 2009. In
       addition, in July 2004 the Company granted 410,000 options for legal and
       consulting services provided to the Company. The options were granted
       with exercise prices equal to the quoted market price at the date of the
       grant and expire in July 2009.

2.   DISCONTINUED OPERATIONS:

     Through March 1, 2002, Key's credit card products were marketed for Net
       First National Bank ("Net First") under an agreement that provided the
       Company with a 100% participation interest in the receivables and related
       rights associated with credit cards issued, and required the payment of
       monthly servicing fees to Net First. The Company provided collection and
       customer services related to the credit cards issued. On March 1, 2002,
       federal banking regulators closed Net First, which was the sole issuing
       bank for Key's PAY AS YOU GO credit card program.

     On March 4, 2002, the Federal Deposit Insurance Corporation ("FDIC")
       notified the Company that it had been appointed receiver of all funds due
       from Net First to Key. As receiver, the FDIC elected to disaffirm, to the
       full extent, all contracts Key was a party to with Net First. On March
       10, 2002, the Company was made aware that the FDIC was notifying Net
       First credit card holders that their accounts were to be closed, and
       accordingly, Key would not be able to transfer the existing PAY AS YOU GO
       credit card portfolio to a successor financial institution. In November
       2002, the Company filed a lawsuit seeking to recover the full amount of a
       claim with the FDIC for all funds due from Net First to Key through the
       date federal banking regulators closed Net First (Note 7).

     The Company immediately implemented steps to eliminate Key's operating
       costs associated with marketing and servicing the Net First program.
       These steps included employee lay-offs of all but essential management
       and employee personnel necessary to re-establish its marketing and
       servicing capabilities upon the establishment of a new relationship with
       another financial institution. The Company had discussions with financial
       institutions to initiate a new credit card program; however, the Company
       was not able to establish such a relationship. During the fourth quarter
       of 2003, "run-off" operations which consisted of processing residual
       payments on remaining active accounts in its portfolio ceased.

     The carrying amounts of assets and liabilities of Key at June 30, 2004 and
       December 31, 2003 are as follows:

                                                 June 30,    December 31,
                                                   2004          2003
                                               -----------    ----------

       Cash                                    $       233    $    1,055
                                               -----------    ----------
         Total assets                          $       233    $    1,055
                                               ===========    ==========

       Accounts payable                        $   490,392    $  524,829
       Accrued expenses                             25,000        25,000
       Notes payable, related party                 74,484        71,939
                                               -----------    ----------
         Total liabilities (all current)       $   589,876    $  621,768
                                               ===========    ==========

                                       15
<PAGE>
                       EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

2.   DISCONTINUED OPERATIONS (CONTINUED):

     Key had no revenues for the six months ended June 30, 2004 and $19,502 of
       revenues for the six months ended June 30, 2003, which are included in
       discontinued operations. Losses incurred by Key for the six months ended
       June 30, 2004 and 2003 were $5,729 and $36,968, respectively.

3.   RECEIVABLES:

     Receivables at June 30, 2004 and December 31, 2003 consist of the
       following:

                                                         June 30,   December 31,
                                                           2004         2003
                                                       -----------  -----------
     Credit card and ATM processors, net of allowance
       of $65,000 (2004) and $0 (2003)                 $ 1,022,013  $ 2,278,232
     Due from Paymaster Jamaica                            608,000      608,000
     Amount held in trust                                  221,956      258,642
     Credit card receivables, net of allowance for
       losses of $1,020 (2004) and $1,545 (2003)           135,226      153,547
     Other receivables                                     194,887      210,699
                                                       -----------  -----------
                                                       $ 2,182,082  $ 3,509,120
                                                       ===========  ===========

     Amounts due from credit card and ATM processors arise primarily from credit
       card and ATM advances by Chex to casino patrons. Amounts due from
       Paymaster Jamaica are due for services performed by Denaris, which have
       been recorded as deferred revenue at June 30, 2004 and December 31, 2003
       (presented in accrued expenses and other liabilities). The amount held in
       a trust under an agreement is to secure payment of reservation fees due
       to customers. The amount is held by a third party financial institution.
       Credit card receivables include refundable and earned fees, which
       represent the balance reported to customers. Credit card receivables are
       reduced by allowances for refundable fees and losses.


4.   NOTES AND INTEREST RECEIVABLE:

     Notes and interest receivable as of June 30, 2004 and December 31, 2003
       consist of the following:

                                                         June 30,   December 31,
                                                          2004         2003
                                                       -----------  -----------
     Note receivable, iGames                           $ 2,000,000
     Notes receivable from the estate of a
       deceased Chex officer                             1,484,691  $ 1,484,691
     Note receivable, customer                             345,500      350,000
     Note receivable, officer of Chex                      485,936      485,936
     Note receivable, Paymaster Jamaica                    500,000      500,000
     Notes receivable, Equitex 2000                      1,302,012    1,266,556
     Notes receivable from various Chex employees           57,973       53,700
                                                       -----------  -----------
                                                         6,176,112    4,140,883

     Interest receivable                                   257,162      136,633
     Less current maturities                               (66,973)    (707,155)
                                                       -----------  -----------
     Notes receivable, net of current portion            6,366,301    3,570,361

     Less allowance for uncollectible notes receivable  (1,607,299)  (1,463,299)
                                                       -----------  -----------
                                                       $ 4,759,002  $ 2,107,062
                                                       ===========  ===========

                                       16
<PAGE>
                        EQUITEX, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

4.   NOTES AND INTEREST RECEIVABLE (CONTINUED):

     As of June 30, 2004 and December 31, 2003, the allowance for uncollectible
       notes receivable is comprised of an allowance of $1,197,299 as of June
       30, 2004 and $1,053,299 as of December 31, 2003 on the receivable from a
       the estate of a deceased Chex officer, a $250,000 allowance on the
       Paymaster Jamaica note as of June 30, 2004 and December 31, 2003 and a
       $160,000 allowance on the notes receivable from Equitex 2000 as of June
       30, 2004 and December 31, 2003.

     In January 2004, Chex advanced iGames $2,000,000 under a Term Loan Note
       (the "Note"). Interest accrues at 10% per annum, and the maturity date
       was scheduled to occur in January 2005, as defined in the Note. The Note
       was to be secured by a pledge of capital stock of the borrower pursuant
       to a stock pledge agreement. The stock pledge agreement was not executed
       which resulted in an event of default under the terms of the Note.
       Therefore, Chex has demanded the entire unpaid principal and accrued
       interest due in full. Chex has commenced litigation relating to the
       collection of the Note (Note 7). The Company has presented the note as a
       long-term asset at June 30, 2004 due to uncertainty as to the anticipated
       litigation settlement date.

5.   GOODWILL, INTANGIBLE AND OTHER ASSETS:

     SFAS No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS, prescribes a two-phase
       process for impairment testing of goodwill, which is performed once
       annually, absent indicators of impairment. The first phase screens for
       impairment, while the second phase (if necessary) measures the
       impairment. The Company has elected to perform its annual analysis during
       the fourth calendar quarter of each year. No indicators of impairment
       were identified during the six months ended June 30, 2004.

<TABLE>
<CAPTION>

     Intangible and other assets consist of the following at June 30, 2004 and
     December 31, 2003:
                                         June 30, 2004                              December 31, 2003
                         --------------------------------------------  ----------------------------------------
                             Gross                           Net           Gross                         Net
                            carrying     Accumulated       carrying       carrying     Accumulated    carrying
                             amount     amortization        amount         amount     amortization     amount
                         -------------  -------------  --------------  -------------  -------------  ----------
<S>                      <C>            <C>            <C>             <C>            <C>            <C>
Casino contracts         $   4,300,000  $   1,649,440  $    2,650,560 $    4,300,000  $   1,349,440  $2,950,560
Non-compete agreements         350,000        195,300         154,700        350,000        163,300     186,700
Customer lists                 250,000        216,600          33,400        250,000        178,600      71,400
Trade names                    100,000                        100,000        100,000                    100,000
                         -------------  -------------  --------------  -------------  -------------  ----------
Total intangible assets      5,000,000      2,061,340       2,938,660      5,000,000      1,691,340   3,308,660
Deferred loan costs            499,700         44,126         455,574
Other assets                    49,733                         49,733         49,733                     49,733
                         -------------  -------------  --------------  -------------  -------------  ----------
                         $   5,549,433  $   2,105,466  $    3,443,967  $   5,049,733  $   1,691,340  $3,358,393
                         =============  =============  ==============  =============  ============   ==========
</TABLE>

                                       17
<PAGE>
                      EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

6.   NOTES AND LOANS PAYABLE, AND LONG-TERM DEBT:

     NOTES AND LOANS PAYABLE:

     Notes and loans payable at June 30, 2004 and December 31, 2003, consist of
       the following:

                                                        June 30,   December 31,
                                                         2004         2003
                                                      -----------  -----------
     Notes payable to individual investors            $10,217,677  $10,692,177
     Note payable to officer of Chex                       14,344      150,000
     Note payable to affiliate through
      common ownership                                                   5,421
     Convertible promissory notes                         185,000      185,000
     Note payable under litigation settlement                          400,000
                                                      -----------  -----------
                                                      $10,417,021  $11,432,598
                                                      ===========  ===========

     LONG-TERM DEBT:
                                                        June 30,   December 31,
                                                         2004         2003
                                                      -----------  ------------
     Convertible promissory notes due to financial
      institutions, net of discount [A]               $ 4,321,395
     Convertible promissory note, due to advisory
      firm [B]                                            300,000
     Note payable to a bank, repaid in March 2004                  $    150,000
     Obligations under capital leases                      63,107        88,970
                                                      -----------   -----------
                                                        4,684,502       238,970
     Less current maturities                           (1,139,900)     (201,727)
                                                      -----------   -----------
                                                      $ 3,544,602   $    37,243
                                                      ===========   ===========

     [A] In March 2004, the Company closed on $5,000,000 of convertible
            promissory notes (the "Notes") with two financial institutions (the
            "Lenders"). The Notes carry a stated interest rate of 7% per annum
            and have a 45-month term. Interest only payments are due April 2004
            through June 2004. Beginning in July 2004, principal and interest
            payments will amortize over the remaining 42-month period. The Notes
            are senior to all other debt of the Company and are collateralized
            by all assets of Chex as defined in the security agreement.

         The Notes are convertible into common stock at $1.35 per share up to an
            amount equal to 4.99% of the Company's outstanding common stock. In
            June 2004, the Company reduced this conversion price to $1.1475 per
            share. The Company has the right to make any monthly payment of
            principal and interest in shares of its common stock. The common
            stock is to be issued based on 85% of the average bid price for 20
            trading days prior to the payment due date. The maximum number of
            shares that can be delivered as payment is to be equal to 10% of the
            average monthly trading volume for the month prior to the payment
            due date. The Company may also issue common shares each month in an
            amount not to exceed 10% of the prior month's total share volume as
            payment, to be applied to the outstanding principal balance up to a
            value of $100,000. Any beneficial conversion features will be
            recorded in earnings at the time of conversion, as the number of
            shares the holder will receive is not known until the triggering
            event occurs.

                                       18
<PAGE>
                       EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

6. NOTES AND LOANS PAYABLE AND LONG-TERM DEBT (CONTINUED):

   LONG-TERM DEBT (CONTINUED):

         The Notes contain certain anti-dilution provisions requiring the
            Company to pay the Lenders as collateral, the pro-rata number of
            shares the Lenders would receive in any spin-off or dividend from
            the Company as if the remaining principal balance under the Note was
            fully converted at $1.35 per share. The dividend shares are to be
            segregated and may be liquidated at the discretion of Lenders. At
            the end of each quarter, 85% of the proceeds are to be applied to
            the principal balance as long as the Company is current in monthly
            principal and interest payments.

         The Lenders also received warrants to acquire up to 800,000 shares of
            the Company's common stock at an exercise price of $1.50. The
            warrants are exercisable for a period of five years, and include a
            cashless exercise provision. These warrants were valued at $358,400
            based upon the Black-Scholes option-pricing model, and therefore
            $358,400 of the total costs were allocatd to the warrants, resulting
            in an imputed interest rate of 7.5%. In June 2004, the Company
            reduced the exercise price of these warrants to $1.275 per share. As
            a result of the reduction in exercise price, the Company allocated
            an additional $34,000 to these warrants. The Company reduced the
            carrying value of the Notes by this amount and is amortizing the
            discount to interest expense over the 45-month term of the Note.
            Accordingly, $31,856 has been recorded as interest expense for the
            six months ended June 30, 2004. In addition, warrants to acquire up
            to 300,000 shares of Equitex common stock exercisable at $1.00 per
            share for a period of two years were issued to an advisory firm in
            connection with the transaction. These warrants were valued at
            $164,700 based upon the Black-Scholes option-pricing model. The
            Company also paid cash of $320,000 for legal services and
            finders' fees in connection with the transaction. The Company
            recorded the value of these warrants and the cash paid as deferred
            loan costs and is amortizing these costs over the 45-month term of
            the Notes. Accordingly, $43,084 is included in general and
            administrative expenses for the six months ended June 30, 2004.

         The Company was required to file with the Securities and Exchange
            Commission a regitration statement registering common shares
            underlying conversion of the Notes, warrants and shares used to make
            monthly payments. The registration statement was declared effective
            July 13, 2004.

     [B] In connection with the June 7, 2004 Merger Agreement, the Company
            received $400,000 in exchange for a convertible promissory note. The
            note is convertible into 4,000,000 shares ($0.10 per share) of FFFC
            common stock upon the occurrence of certain future events, and bears
            interest at 5% per annum. Unless converted, any outstanding balance
            of principal and interest is due on April 14, 2007. On June 29,
            2004, an advisory agreement between Chex and the lender was executed
            (Note 7), as a result, 25% ($100,000) of the note was converted
            into 1,000,000 shares of FFFC common stock. An additional 25%
            ($100,000) shall be converted upon an independent director being
            added to the FFFC Board and delivery to FFFC of a list of potential
            acquisition candidates. The remaining 50% ($200,000) shall convert
            to 2,000,000 shares of FFFC common stock upon FFFC's execution of a
            definitive merger acquisition or agreement of an entity having not
            less than $10,000,000 in revenue. The conversion of the note is
            deemed to be beneficial as the note converts to common stock of FFFC
            at $0.10 per share(the fair value of FFFC's stock was determined to
            be $1.00 per share on the date of closing). The intrinsic value of
            the beneficial conversion feature is limited to the amount of the
            proceeds allocated to the convertible note; therefore the value of
            the convertible feature was determined to be $400,000. In connection
            with conversion of the 25% portion of the note to common stock on
            June 29, 2004, the Company recorded an additional $100,000 of
            interest expense related to the beneficial conversion feature. As
            the remaining 75% of the conversion feature is contingent upon the
            occurrence of future events, it will be recorded in earnings when
            converted.

                                       19
<PAGE>


                      EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

7.   COMMITMENTS AND CONTINGENCIES:

     LITIGATION:

     In March 2004, Chex commenced a lawsuit in Hennepin County, Minnesota
       demanding repayment of $2,000,000, plus a $1,000,000 termination fee,
       accrued interest and other fees, due from iGames under a term note made
       in January 2004. In addition, in March 2004, the Company commenced a
       lawsuit in Delaware state court (New Castle county) relative to the
       termination of the SPA. In March 2004, iGames commenced a lawsuit in
       United States District Court for the District of Delaware relative to
       both the termination of the SPA and iGames' obligations under the term
       note, which is the subject of Chex's lawsuit in Hennepin County,
       Minnesota. The Company is confident that its claims in litigation will be
       upheld and management believes that the claims made by iGames lack merit.
       The Company intends to vigorously prosecute its claims and defend against
       iGames' claims. dismissed without prejudice.

     In May 2002, Key filed a claim with the FDIC for all funds due from Net
       First to Key under the Credit Card Program Agreement through the date
       federal banking regulators closed Net First. The total amount of the
       claim was $4,311,027. In October 2002, the FDIC notified Key that it had
       determined to disallow all but $111,734 of the total claim. The
       notification states that as the FDIC liquidates the assets of the
       receivership, Key may periodically receive payments on the allowed
       portion of this claim through dividends. The Company does not agree with
       this disallowance. In November 2002, the Company filed a lawsuit in the
       United States District Court for the Southern District of Florida seeking
       to recover the full amount of its claim. The FDIC answered the complaint,
       asserting a counterclaim for $1,000,000, which the FDIC asserts is for
       refunds to be made to customers who did not receive credit cards as a
       result of FDIC actions.

     The Company is currently in settlement negotiations as part of mediation
       with the FDIC regarding this lawsuit.

     In August 2000, William G. Hays, Jr., liquidating agent for RDM Sports
       Group, Inc. and related debtors, filed an adversary proceeding against
       Equitex, Smith Gambrell and Russell, LLP, David J. Harris, P.C. and David
       J. Harris. The liquidating agent alleged that the Company breached its
       October 29, 1987, consulting agreement with RDM, breached fiduciary
       duties allegedly owed to RDM, and that Equitex is liable for civil
       conspiracy and acting in concert with directors of RDM. In November 2003,
       Equitex reached a settlement agreement with the liquidating agent in
       exchange for the dismissal of the adversary proceeding and the execution
       of a mutual release of claims by both parties. On May 20, 2004 Equitex
       paid the $400,000 in cash to the liquidating agent. In connection with
       the Company's distribution of its assets and liabilities to Equitex 2000,
       Inc. ("Equitex 2000") on August 6, 2001, Equitex 2000 has agreed to
       indemnify the Company. As a result, the Company has recorded a receivable
       of $400,000 from Equitex 2000 as of June 30, 2004 and December 31,
       2003.

     The Company is involved in various other claims and legal actions arising
       in the ordinary course of business. In the opinion of management, the
       ultimate disposition of these matters will not have a material adverse
       impact either individually or in the aggregate on consolidated results of
       operations, financial position or cash flows of the Company.

                                       20
<PAGE>
                        EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

7.   COMMITMENTS AND CONTINGENCIES (CONTINUED):

     BONUS TO OFFICER:

     In June 2003, the Company's Board of Directors approved a bonus arrangement
       with the Company's president. The bonus arrangement, effective June 2,
       2003, provides for an annual bonus to be calculated quarterly based on 5%
       of the increase in the market value of the Company's common stock,
       accrued quarterly, beginning with the closing price as reported by Nasdaq
       on December 31 of each year, and ending with the closing price on
       December 31 of the following year. Payments under the bonus arrangement
       are to be made at the discretion of the Company's management from time to
       time, as cash flow permits. Total compensation expense recorded under
       this arrangement for the year ended December 31, 2003 was approximately
       $1,490,000. Based on the bonus calculation, no expense was recorded for
       the six months ended June 30, 2004. The Company paid approximately
       $209,000 in 2003 and approximately $655,100 for the six months ended June
       30, 2004. As of June 30, 2004, approximately $626,000 is included in
       accrued liabilities.

     CONSULTING AGREEMENT:

     In May 2004, Chex entered into a consulting agreement with an exclusive
       financial advisor to provide services relating to assistance provided in
       the placement of debt or equity financing with prospective investors and
       facilitating future merger, acquisition and strategic partnerships on
       behalf of the Company. The term of the agreement is two years and
       requires the Company to pay a total of $240,000 to the financial advisor
       in monthly installments of $10,000 each month.

8.   STOCKHOLDERS' EQUITY:

     AUTHORIZED CAPITAL:

     The Company's authorized capital consists of, among other classes of
       securities, 50,000,000 common shares. As of June 30, 2004, there are
       35,061,646 common shares issued and 34,125,578 shares outstanding. In
       addition, the Company has warrants and options outstanding, a $5 million
       convertible promissory note outstanding, and certain classes of
       securities outstanding which are convertible into common shares
       outstanding, all of which would, if converted, cause the Company to
       exceed its authorized common shares. This is prohibited by the laws of
       the State of Delaware and therefore, until the Company is able to convene
       a Special Meeting of the Shareholders pursuant to the proxy solicitation
       requirements of Section 24 of the Securities Exchange Act of 1934, and
       the laws of the State of Delaware, it cannot permit all outstanding
       conversions, which means that Company is or will be in default of certain
       terms and conditions of such instruments. The securities affected consist
       of the following at June 30, 2004:

       (1)  408 shares of Series D preferred shares convertible into 697,436
            common shares,
       (2)  370 shares of Series G preferred shares convertible into 632,479
            common shares,
       (3)  1,600 shares of Series I preferred shares convertible into 2,735,043
            common shares,
       (4)  $5,000,000 of convertible debt convertible into 3,703,704 shares,
       (5)  Warrants convertible into 8,786,902 common shares of which
            5,508,811 expire in 2004 and have an average exercise price of $4.68
            per share, and (6) Options convertible into 1,786,700 common shares.

     SERIES D CONVERTIBLE PREFERRED STOCK:

     The Series D Preferred Stock is convertible, together with any cumulative
       unpaid dividends, at any time into shares of the Company's common stock
       at a conversion price equal to 65% of the average closing bid price of
       the Company's common stock as specified in the agreement.

                                       21
<PAGE>
                       EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

8.   STOCKHOLDERS' EQUITY (CONTINUED):

     SERIES D CONVERTIBLE PREFERRED STOCK (CONTINUED):

     The holder of each share of Series D convertible preferred stock is
       entitled to a 6% cumulative annual dividend, payable quarterly. Dividends
       are payable in cash or, at the Company's option, in shares of the
       Company's common stock. The Series D Preferred Stock contains liquidation
       preference equal to the sum of the stated value of each share plus an
       amount equal to 130% of the stated value plus the aggregate of all
       cumulative unpaid dividends on each share of Series D Preferred Stock
       until the most recent dividend payment date or date of liquidation,
       dissolution or winding up of the Company.

     In January 2004, the Company redeemed 93 shares of Series D Preferred Stock
       for $151,000, which included $25,450 of cumulative unpaid dividends.
       During the second quarter of 2004, the redemption of these shares was
       voided and the cash was returned to the Company.

     SERIES G CONVERTIBLE PREFERRED STOCK:

     The Series G Preferred Stock is convertible, together with any cumulative
       unpaid dividends, at any time into shares of the Company's common stock
       at a conversion price per share equal to the lesser of $6.50 or 65% of
       the average closing bid price of the Company's common stock as specified
       in the agreement.

     SERIES G CONVERTIBLE PREFERRED STOCK (CONTINUED):

     The holder of each share of the Series G Preferred Stock is entitled to
       cumulative dividends at 6% per annum plus a 4% dividend default rate,
       payable quarterly. Dividends are payable in cash or, at the Company's
       option, in shares of the Company's common stock. The Series G Preferred
       Stock contains a liquidation preference equal to the sum of the stated
       value of each share plus an amount equal to 130% of the stated par value
       plus the aggregate of all cumulative unpaid dividends on each share of
       Series G Preferred Stock until the most recent dividend payment date or
       date of liquidation, dissolution or winding up of the Company. All
       outstanding shares of Series G Preferred Stock were to automatically
       convert into common stock on August 31, 2003. However, the Company has
       been negotiating with the holder to extend the terms, therefore the
       holder has not elected to convert the preferred shares to common stock.
       The Series G Preferred Stock is redeemable at the Company's option at any
       time prior to its conversion, at a redemption price equal to $1,350 per
       share plus any cumulative unpaid dividends.

     SERIES I CONVERTIBLE PREFERRED STOCK:

     The Series I Preferred Stock is convertible, together with any cumulative
       unpaid dividends, at any time into shares of the Company's common stock
       at a conversion price per share equal to the lesser of $5.98 or 65% of
       the average closing price of the Company's common stock as specified in
       the agreement.

     The holder of each share of Series I Preferred Stock is entitled to
       cumulative dividends at 6% per annum plus a 4% dividend default rate,
       payable quarterly. Dividends are payable in cash, or at the Company's
       option, in shares of the Company's common stock. The Series I Preferred
       Stock contains a liquidation preference equal to the sum of the stated
       value of each share plus an amount equal to 125% of the stated value plus
       the aggregate of all cumulative unpaid dividends on each share of Series
       I Preferred Stock until the most recent dividend payment date or date of
       liquidation, dissolution or winding up of the Company. All outstanding
       shares of the Series I Preferred Stock automatically convert into common
       stock on July 20, 2004. However, the Company has been negotiating with
       the holder to extend the terms, therefore the holder has not elected to
       convert the preferred shares to common stock. The Series I Preferred
       Stock is redeemable at the Company's option at any time prior to its
       conversion, at a redemption price equal to $1,250 per share plus any
       cumulative unpaid dividends.

                                       22
<PAGE>
                        EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

8.   STOCKHOLDERS' EQUITY (CONTINUED):

     STOCK SUBSCRIPTION RECEIVABLE:

     In December 2003, Chex sold 1,000,000 shares of Equitex common stock owned
       by Chex and which represent treasury stock of the Company, in exchange
       for $200,000 cash and an $800,000 promissory note. The note is presented
       as a reduction of stockholders' equity. The note has an interest rate of
       7% per annum and is payable in three installments of principal and
       interest through June 30, 2004. The note currently is in default. The
       note is secured by a pledge agreement which grants Chex a security
       interest in 700,000 of the purchased shares. A payment of $200,000 was
       received during the three months ended June 30, 2004.

     The Company has been informed that it is the intent of the note holder to
       return 500,000 shares of Equitex common stock in full payment of the
       remaining $600,000 receivable. Since the current market price of 500,000
       shares of common stock is approximately $350,000, the Company had reduced
       the receivable by $250,000 and charged equity (additional paid-in
       capital).

     ISSUANCES OF COMMON STOCK:

     During the six months ended June 30, 2004, the Company issued 412,200
       shares of common stock upon the exercise of stock options for $131,334
       cash and for retirement of interest and note payable of $148,962 at an
       average exercise price of $0.68 per share.

     During the six months ended June 30, 2004, the Company also issued 119,406
       shares of common stock upon the conversion of warrants for $41,388, at an
       average conversion price of $0.35 per share.

     During the six months ended June 30 2004, the Company converted $25,647 of
       accounts payable for common stock previously issued as contingent
       consideration. The common stock was issued in December 2003 as contingent
       consideration for accounts payable. Under the agreement, as the shares of
       stock are sold by the holder, the accounts payable due to holder by the
       Company are reduced.

     TREASURY STOCK TRANSACTIONS:

     During the six months ended June 30, 2004, Chex sold 483,500 shares of
       Equitex common stock for approximately $492,032 or $1.02 per share (the
       market price of the common stock at the date of sale). The stock was
       acquired at an average cost of approximately $0.46 per share and the cost
       of the shares sold ($223,867) has been removed from treasury stock. The
       difference between the sales price and cost of the shares sold ($268,165)
       has been classified as additional paid in capital.

     During the six months ended June 30, 2004, Chex purchased 103,500 shares of
       Equitex common stock for $113,625 or $1.10 per share (the market price of
       the Company's common stock on the purchase date). The cost of the shares
       has been added to treasury stock.

     During the six months ended June 30, 2004, Chex distributed 45,000 shares
       of Equitex common stock to third parties for services rendered to
       Equitex. Accordingly, Equitex has recorded an expense of $50,750 or
       approximately $1.13 per share (the market price of the common stock on
       the distribution date).

                                       23
<PAGE>
                       EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                     SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

9.   INCOME TAXES:

     During the quarter ended June 30, 2004, management assessed the realization
       of its deferred tax assets. Based on this assessment, management
       concluded that it was more likely than not that existing deferred tax
       assets would not be realizable in the foreseeable future and determined
       that the valuation allowance should be increase to fully allow for its
       recorded deferred tax assets. Accordingly, the Company's valuation
       allowance was increased by $1,380,000, which resulted in an increase to
       the provision for income taxes of the same amount.

                                       24
<PAGE>

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

THIS REPORT MAY CONTAIN CERTAIN "FORWARD-LOOKING" STATEMENTS AS SUCH TERM IS
DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 OR BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING BUT NOT LIMITED TO,
STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC PERFORMANCE, FINANCIAL
CONDITION, GROWTH AND ACQUISITION STRATEGIES, INVESTMENTS, AMOUNTS RECEIVABLE
FROM NET FIRST NATIONAL BANK, AND FUTURE OPERATIONAL PLANS, FOR THIS PURPOSE,
ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY
BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, WORDS SUCH AS "MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE",
"INTENT", "COULD", "ESTIMATE", "MIGHT", OR "CONTINUE" OR THE NEGATIVE OR OTHER
VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL
RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL, AND
ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON THE VARIETY OF IMPORTANT
FACTORS, INCLUDING UNCERTAINTY RELATED TO THE COMPANY'S OPERATIONS, MERGERS OR
ACQUISITIONS, GOVERNMENTAL REGULATION, THE VALUE OF THE COMPANY'S ASSETS AND ANY
OTHER FACTORS DISCUSSED IN THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION.
GENERAL

Effective June 7, 2004, the Company executed an Agreement and Plan of Merger
(the "Merger Agreement") with Seven Ventures, Inc. ("SVI") to merge its
wholly-owned subsidiary Chex Services, Inc. ("Chex") into a wholly-owned
subsidiary of SVI (the "Merger Subsidiary"), where upon the separate corporate
existence of the Merger Subsidiary ceased. Under the terms of the Merger
Agreement, Equitex exchanged 100% of its equity ownership in Chex for 7,700,000
shares of SVI, representing 93% of SVI's outstanding common stock following the
transaction. In addition, Equitex received warrants to purchase 800,000 shares
of SVI common stock at an exercise price of $0.10 per share, expiring five years
from the date of closing. As a result, Chex became a wholly-owned subsidiary of
SVI, a publicly traded shell company. On June 29, 2004, SVI changed its name to
FastFunds Financial Corporation ("FFFC"). In addition, under the terms of the
Merger Agreement, a bridge loan was consummated with an international merchant
bank, whereby SVI received $400,000 through the issuance of a convertible
promissory note. The promissory note is convertible into 4,000,000 shares of SVI
common stock upon the occurrence of certain future events.

                                       25
<PAGE>

In August 2004, the Company along with its majority owned subsidiary, Denaris,
executed a non-binding letter of intent to acquire Digitel Network Corporation,
Platinum Benefit Group, Inc., National Business Communications, Inc., Personal
Voice, Inc. and Private Voice, Inc. (collectively the "Companies") all based in
Clearwater, Florida. The Companies design, develop and market stored value card
programs as well as personal voice mail products through their call center
operations. In conjunction with their stored value card products, the Companies
offer the Platinum Benefit Group premium service that includes vehicle roadside
assistance, a prescription discount program, a dental care discount program, a
registered nurse hotline and a family legal plan. The Companies also offer
personal voice mail services through Personal Voice, Inc. and Private Voice,
Inc. Completion of this transaction is subject to further due diligence by both
parties, negotiation and execution of a definitive agreement, necessary state or
federal regulatory approvals, board of director approval and any necessary
stockholder approvals.

In addition, in August 2004 the Company along with its majority owned
subsidiary, Denaris, executed a non-binding letter of intent to enter into a
joint venture agreement with Financial Freedom International ("FFI") of Orem,
Utah to distribute Denaris' stored value card and payroll card products to its
customers. FFI is a provider of educational materials, software and services to
consumers with troubled debt. Their products and services help people in
financial crisis avoid bankruptcy, improve credit rating and reduce their debt
to manageable levels. FFI offers financial fitness analysis, comprehensive
training courses, a smart savings program, a personalized spending plan,
customized debt elimination, coaching sessions and ongoing support. Course
materials teach a variety of money management principles and offer sophisticated
ways to budget and save money, including the use of stored value cards. Products
are packaged in a variety of formats including print, videotape, CD-ROM and the
Internet. Completion of this transaction is subject to further due diligence by
each party, negotiation and execution of a definitive agreement, and other
customary pre-closing conditions.

OVERVIEW

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the consolidated/combined
financial statements and notes thereto for the years ended December 31, 2003,
2002 and 2001. The financial results presented for the six months ended June 30,
2004 and 2003 are those of Chex Services, Inc. ("Chex") through June 6, 2004,
Key Financial Systems, Inc. ("Key"), Nova Financial Systems, Inc. ("Nova") and
Denaris Corporation ("Denaris"), on a consolidated basis with those of Equitex,
Inc. The financial results subsequent to June 6, 2004 include the results of SVI
(which subsequently changed its name to FastFunds Financial Corporation) and its
wholly-owned subsidiary Chex.

LIQUIDITY AND CAPITAL RESOURCES

For the year ending December 31, 2004, we presently anticipate our liquidity and
capital resource needs will be satisfied from cash flows generated from our
operating activities.

Our main operating subsidiary, FastFunds, anticipates positive cash flows in
2004. Additionally, Chex has begun to introduce new products during the year.
These products are complementary to its existing products and services. Future
products may include: cashless gaming smart cards, debit cards and customized
funds transfer systems for multi-jurisdictional gaming operators.

                                       26
<PAGE>

Cash flow activity for the six months ended June 30, 2004 and 2003, includes The
activity of Chex, Key and Nova, Equitex, and Denaris. For the six months ended
June 30, 2004, net cash used in operating activities from continuing operations
was $880,379 compared to $1,061,574 for the six months ended June 30, 2003. The
most significant portion of this change was the increase in the loss in the six
months ended June 30, 2004 compared to June 30, 2003. The increase loss was
offset by changes in current assets and liabilities which provided cash and
adjusted the net loss by $415,953 for the six months ended June 30, 2004
compared to the changes in the same assets and liabilities which used cash for
the six months ended June 30, 2003 of $981,052. Additionally, non-cash
adjustments to the current year's results were $2,867,859, including
depreciation and amortization of $577,874 an increase in the deferred tax asset
valuation of $1,380,000 and stock-based compensation of $626,750 compared to
total non-cash adjustments of $679,313, mostly comprised of $539,567 and
$277,000, respectively, for depreciation and amortization and stock-based
compensation for the six months ended June 30, 2003. These items were partially
offset by a reduction in the allowance of a note receivable of $174,222 in the
three and six months ended June 30, 2003.

Cash used in investing activities from continuing activities for the six months
ended June 30, 2004 was $2,214,875 compared to $449,476 for the six months ended
June 30, 2003. Cash used in 2004 investing activities was primarily attributable
to net advances of $2,041,773 on notes receivable, purchases of furniture,
fixtures and equipment of $196,317. Cash used in 2003 investing activities was
primarily due to net advances of $323,300 on notes receivable, and purchases of
furniture, fixtures and equipment of $188,280.

Cash provided by financing activities from continuing activities for the six
months ended June 30, 2004 was $1,944,518 compared to cash used in financing
activities from continuing activities of $668,852 for the six months ended June
30, 2003. The significant activity for the six months ended June 30, 2004,
included the Company receiving proceeds of $6,612,000 upon the issuance of notes
payable, receiving $492,032 upon the sale of 483,500 shares of treasury stock by
Chex and proceeds received of $172,722 upon the exercise of options and
warrants. These proceeds were offset by the repayment of notes payable of
$2,585,845, payment of fees of $335,000 related to the issuance of notes
payable, purchase of Equitex shares for treasury by Chex for $113,625 and
repayment of bank overdraft of $2,497,766.

The significant financing activity for the six months ended June 30, 2003,
included the Company receiving $215,416 from the exercise of warrants and the
sale of 226,000 shares of treasury stock by Chex for $147,794. The Company
received proceeds of $770,000 upon the issuance of notes payable and repaid
$1,495,062 of notes payable. During the six months ended June 30, 2003, the
Company also redeemed 1,000 shares of its Series I Preferred Stock for $100,000
in cash.

Net cash used in discontinued operations was $36,799 for the six months ended
June 30, 2004 as compared to $144,858 for the six months ended June, 2003. The
decrease in cash used in discontinued operations is the result of Key ceasing
its run-off operations during the fourth quarter of 2003.

For the six months ended June 30, 2004, net cash decreased by $1,187,535
compared to a decrease of $2,324,760 for the six months ended June 30, 2003.
Ending cash at June 30, 2004, was $6,872,245 compared to $6,601,364 at June 30,
2003. Significantly all of the Chex's cash is required to be utilized for its
casino operations and they are prohibited from using it for other corporate
purposes. Consequently Equitex needs to rely on other sources for its liquidity
needs.

In March 2004, the Company closed on $5,000,000 of convertible promissory Notes
(the "Notes") with two financial institutions (the "Lenders"). The Notes carry
an interest rate of 7% per annum and have a 45-month term. Interest only
payments are due monthly beginning in April 2004 through June 2004. Beginning in
July 2004, principal and interest payments will amortize over the remaining
42-month period. The Notes are senior to all other debt of the Company and are
collateralized by all assets of Chex and the Company's stock ownership in Chex.

Other sources available to us that we may utilize include the sale of equity
securities through private placements of common and/or preferred stock as well
as the exercise of stock options and/or warrants, all of which may cause
dilution to our stockholders.

                                       27
<PAGE>

RESULTS OF OPERATIONS

REVENUES

Consolidated revenues for the three months ended June 30, 2004 from continuing
operations was $3,524,727 compared to $4,662,227 for the three months ended June
30, 2003. Consolidated revenues for the six months ended June 30, 2004, were,
$7,066,541 compared to consolidated revenues of $9,365,227 for the six months
ended June 30, 2003. The decrease in each period was due primarily to the loss
of revenues resulting from the closure of five Seminole Tribe casino locations
located throughout Florida in January 2004.

                               Three months ended           Six months ended
                                    June 30,                     June 30,
                                2004           2003         2004           2003
                            -----------   -----------   -----------   ----------

Cash disbursement services  $3,458,260    $4,545,486   $6,921,363     $9,119,437
Credit card services            66,467       116,741      145,178        245,790
                            -----------   -----------  -----------   -----------
                            $3,524,727    $4,662,227   $7,066,541     $9,365,227
                            ===========   ===========  ===========   ===========

CASH DISBURSEMENT SERVICES

Revenues for the three months ended June 30, 2004 and 2003 were $3,458,260 and
$4,545,488, respectively, compared to revenues of $6,921,363 and $9,119,437 for
the six months ended June 30, 2004 and 2003. The decrease in both periods was
due primarily to the loss of revenues resulting from the closure of five
Seminole Tribe casino locations located throughout Florida in January 2004,
which provided approximately $4 million in revenues per year.

Chex recognizes revenue at the time certain financial services are performed.
Revenues are derived from check cashing fees, credit and debit card advance
fees, automated teller machine ("ATM") surcharge and transaction fees, and NSF
collection fees. Chex revenues for the three months ended June 30, 2004 and 2003
were comprised of:
<TABLE>
<CAPTION>

                                          2004                                              2003
                    ----------------------------------------------     ----------------------------------------------
                     Number of          Dollars          Earned         Number of         Dollars           Earned
                    Transactions        Handled         Revenues       Transactions       Handled          Revenues
                    ------------     ------------     ------------     ------------     ------------     ------------
<S>                 <C>              <C>              <C>              <C>              <C>              <C>
Personal checks          163,923     $  30,295,833    $  1,556,525          213,907     $40,306,680      $  2,068,114
"Other" checks            64,674        20,357,481         191,244           89,438      35,081,167           241,704
Credit cards              52,280        17,851,730         737,985           92,524      31,377,646         1,199,131
Debit cards                7,817         2,402,603          34,425           15,707       5,046,710           104,103
ATM transactions         434,128        36,590,380         824,358          916,147      87,354,568           803,529
NSF Collection
  Fees                         -                 -         100,675                -               -           117,231
Other                          -                 -          13,048                -               -            11,676
                    ------------     ------------     ------------     ------------     ------------     ------------
                         722,822     $107,498,027     $  3,458,260        1,327,723     $199,166,771     $  4,545,488
                    ============     ============     ============     ============     ============     ============
</TABLE>
                                       28
<PAGE>



Chex revenues for the six months ended June 30, 2004 and 2003 were comprised of
the following:
<TABLE>
<CAPTION>

                                         2004                                              2003
                    ----------------------------------------------     ----------------------------------------------
                     Number of          Dollars          Earned         Number of          Dollars           Earned
                    Transactions        Handled         Revenues       Transactions       Handled          Revenues
                    ------------     ------------     ------------     ------------     ------------     ------------
<S>                 <C>              <C>              <C>              <C>              <C>              <C>
Personal checks          323,106     $ 57,769,918     $  3,095,404          428,642     $ 78,787,983     $  4,066,317
"Other" checks           125,441       43,460,655          429,236          181,729       73,407,060          540,522
Credit cards             108,080       36,747,289        1,418,353          182,293       61,891,673        2,393,593
Debit cards               17,786        5,515,917           74,699           30,845       10,893,173          210,880
ATM transactions         862,286       70,137,900        1,607,067        1,812,601      174,697,548        1,625,808
NSF collection fees           -                -           219,542               -                -           246,620
Other                         -                -            77,062               -                -            35,697
                    ------------     ------------     ------------     ------------     ------------     ------------
                       1,436,699     $213,631,679     $  6,921,363        2,636,110     $399,677,437     $  9,119,437
                    ============     ============     ============     ============     ============     ============
</TABLE>

Chex cashes personal checks at its cash access locations for fees of between 3
and 10 percent based on its casino contracts. Chex also cashes "other" checks,
comprised of tax and insurance refunds, casino employee payroll checks and
casino jackpot winnings at a reduced rate.

Chex credit/debit card cash advance services allow patrons to use their VISA,
MasterCard, Discover and American Express cards to obtain cash. Third party
vendors, at their expense, supply, install and maintain the equipment to operate
the cash advance system. Under vendor agreements, the vendor charges each
customer a services fee based upon the cash advance amount and pays a portion of
such service fee to Chex.

Chex receives a surcharge fee for each cash withdrawal from the ATM machines in
locations where Chex provides such services. The surcharge, which is a charge in
addition to the cash advance, is made against the bank account of the customer
and is deposited in the vendor's account. The vendor reimburses Chex for the
cash amount and pays the surcharge commission due.

Chex utilizes its own in-house collections department to pursue collection of
returned checks, and generally charges an insufficient funds fee when it
ultimately collects the check.

In the ordinary course of business, Chex receives new financial services
agreements or renews existing ones as their original terms expire. Chex may also
not renew contracts from certain expiring agreements. In January of 2004, Chex
was advised that 5 existing casino locations were terminating the agreements for
Chex to provide its services. These locations accounted for $1,033,670 and
$2,010,832 in revenues for the three and six months ended June 30, 2003. For the
year ended December 31, 2003, these locations accounted for approximately
$4,090,000 in revenues. Accordingly, Chex anticipates a decline in 2004 revenues
due to the loss of these contracts and the absence of significant new contracts
to replace the revenues lost. Chex has implemented cost savings expense
reductions to minimize the effect of the loss of these contracts.

OPERATING EXPENSES

Total operating expenses from continuing operations for the three and six months
ended June 30, 2004, was $4,701,614 and $8,614,534, compared to $4,774,986 and
$9,400,889,for the three and six months ended June 30, 2003.

                               Three months ended            Six months ended
                                   June 30,                      June 30,
                               2004          2003          2004          2003
                            ----------   ----------     ----------   ----------
Cash disbursement services  $4,087,645   $4,088,873     $7,631,687   $8,181,047
Credit card services            41,222       74,287        132,777      155,881
Corporate activities         1,148,747      611,826      1,426,070    1,063,961
                            ----------   ----------     ----------   ----------
                            $5,277,614   $4,774,986     $9,190,534   $9,400,889
                            ==========   ==========     ==========   ==========

                                       29
<PAGE>

CASH DISBURSEMENT SERVICES

Chex operating expenses of $4,087,645 and $4,088,873 for the three months ending
June 30, 2004 and 2003, and $7,631,681 and $8,181,047 for the six months ended
June 30, 2004 and 2003 were comprised as follows:
<TABLE>
<CAPTION>
                                      Three months     Three months      Six months       Six months
                                         ended            ended             ended           ended
                                     June 30, 2004    June 30, 2003    June 30, 2004    June 30, 2003
                                     -------------    -------------    -------------    -------------
<S>                                  <C>               <C>             <C>              <C>
Fees to casinos                      $   1,209,052     $   1,539,844   $   2,375,200    $   3,048,086
Salaries and related costs               1,189,978         1,462,986       2,473,733        2,944,860
Returned checks, net of collections        167,243            85,317         265,248          123,431
General operating expenses               1,210,885           729,401       1,941,406        1,525,731
Depreciation and amortization              310,487           271,325         576,100          538,939
                                     -------------     -------------   -------------    -------------
                                     $   4,087,645     $   4,088,873   $   7,631,687    $   8,181,047
                                     =============     =============   =============    =============
</TABLE>

Chex pays a fee to casinos as compensation pursuant to the terms of each
financial services agreement that the company has entered into with each
respective establishment. At locations where Chex provides check cashing
services, Chex pays the location operator a commission based upon the monthly
amount of checks cashed, as defined in the agreement. Chex passes on an agreed
upon percentage of the surcharge commissions to the locations where ATM's are
utilized. At all of the locations at which Chex provides credit/debit card
advance services, it pays the operator a commission for each completed
transaction.

Chex Services employs personnel at the locations where it provides check cashing
services as well as corporate staff to support its operations. For the six
months ended June 30, 2004, corporate salaries and related costs were $466,331
and $976,153, respectively, while location salaries and related costs were
$723,547 and $1,497,580. For the three and six months ended June 30, 2003,
corporate salaries and related costs were $479,541 and $1,002,518, respectively,
and location salaries and related costs were $983,445 and $1,942,342. Due to the
terminated locations, Chex Services has reduced staff needs going forward. The
company has reduced staff and in some instances reduced salaries for retained
employees beginning in February 2004. It is anticipated that these reductions on
an annual basis should reduce salary costs by approximately $400,000.

The terminated locations accounted for $466,656 and $922,879 of fees to casinos
for the three and six months ended June 30, 2003. Additional direct costs
associated with the terminated contract locations were $287,090 and $587,763 for
the three and six months ended June 30, 2003.

Included in the cash disbursement segment general operating expenses are
expenses Of FFFC, the parent of Chex, effective June 7, 2004, the date of the
merger of Chex into FFFC. For the three and six months ended June 30, 2004,
these expenses were $146,832 and were mostly comprised of an indemnification fee
of $100,000 related to the merger, $25,000 in professional fees and $20,000
related to a consulting agreement. The term of the consulting agreement entered
into in May 20004, is for two years and requires monthly payments of $10,000
each month.

CORPORATE ACTIVITY

Corporate activity expenses include those of Equitex and Denaris. Total
corporate activity expenses for the three and six months ended June 30, 2004 and
2003 were comprised as follows:
<TABLE>
<CAPTION>
                                      Three months     Three months      Six months       Six months
                                         ended            ended             ended           ended
                                     June 30, 2004    June 30, 2003    June 30, 2004    June 30, 2003
                                     -------------    -------------    -------------    -------------
<S>                                  <C>              <C>              <C>              <C>
Employee costs                       $     111,972    $     228,972    $     223,598    $     372,711
Other                                      410,025          229,854          575,722          414,250
Stock-based compensation                   626,750          192,000          626,750          277,000
                                     -------------    -------------    -------------    -------------
                                     $   1,148,747    $     650,826    $   1,426,070    $   1,063,961
                                     =============    =============    =============    =============
</TABLE>
                                       30
<PAGE>

Employee costs for the three and six months ended June 30, 2004 decreased by
$117,000 as a direct result of a bonus to an officer included in the employee
costs for the three and six months ended June 30, 2003 of $118,000, as well as
for the six months ended June 30, 2003 included start-up costs of $32,966
associated with Denaris.

Other expenses for the three months ended June 30, 2004 and 2003 include
Professional fees of $151,875 and $91,175, respectively, and general operating
expenses of $258,150 and $138,679, respectively.

Other expenses for the six months ended June 30, 2004 and 2003 include
professional fees of $217,990 and $190,341, respectively and general operating
costs of $357,732 and $223,909, respectively. Included in the 2003 amount were
costs associated with the start-up of Denaris of $235,000.

Stock based compensation for the three months ended June 30, 2004 and 2003 was
$626,750 and $192,000, respectively.

Stock based compensation was $626,750 and $277,000 for the six months ended June
30, 2004 and 2003. The expense represents non-cash expenses related to issuances
of common stock and warrants to employees and third party consultants for
services.

CREDIT CARD SERVICES

Nova's operating expenses for the three months ended June 30, 2004 and 2003 were
$41,222 and $74,287, respectively. The 2004 expenses were comprised of third
party servicing fees of $39,498 and other operating expenses of $1,724 compared
to 2003 expenses of $64,655 for third party servicing fees and $9,631 for other
operating expenses.

Nova's operating expenses were $132,777 and $155,881 for the six months ended
June 30, 2004 and 2003, respectively. The 2004 expenses were comprised of third
party servicing fees of $82,109 and other operating expenses of $50,668,
compared to the 2003 expenses of $139,404 for third party servicing fees and
$16,477 for other operating expenses. The decrease in the third party servicing
fees for the 2004 periods compared to the 2003 periods is a direct result of the
reduced credit card revenue in the respective periods. The increase in other
expenses in the 2004 period compared to 2003 was due to legal expenses of
approximately $36,000.

OTHER INCOME (EXPENSE):

Consolidated other expenses for the three months ended June 30, 2004 were
$397,867 compared to $320,936 for the three months ended June 30, 2003. Interest
income increased by $70,714 in the comparative periods, mainly due to interest
income recorded in the current quarter of $50,000 on the iGames $2.0 million
note. Interest expense increased in the 2004 period by $134,166. The majority of
the increase was the result of the interest recorded on the $5.0 million
convertible promissory note.

Consolidated other expenses for the six months ended June 30, 2004 were $648,469
compared to $663,210 for the six months ended June 30, 2003. Interest income
increased by $141,199 for the six months ended June 30, 2004 compared to June
30, 2003. The most significant portion of the increase was $96,111 of interest
income recorded on the Igames $2.0 million note. Additionally, the notes
receivable from Equitex 2000 were substantially higher as of June 30, 2004
compared to June 30, 2003. Accordingly, interest income related to Equitex 2000
was $43,687 for the six months ended June 30, 2004 compared to $23,950 for the
six months ended June 30, 2003.

Interest expense for the six months ended June 30, 2004 increased by $126,461
compared to the six months ended June 30, 2003. The increase was due to interest
of $142,130 on the $5.0 million convertible promissory note, as well as the
beneficial conversion feature of $100,000 charged to interest related to the
$400,000 convertible promissory note issued in the merger. These increases were
offset by lower interest expense related to lower balances on other notes and
loans payable and long-term debt.

DISCONTINUED OPERATIONS

Discontinued operations represents the operations of Key, which ceased during
the fourth quarter of 2003. The loss from discontinued operations was $2,425 and
$5,729 for the three and six months ended June 30, 2004 compared to $7,455 and
$36,968 for the three and six months ended June 30, 2003.

                                       31
<PAGE>

INCOME TAXES, DEFERRED TAXES

Income taxes are provided for the tax effects of transactions reported in the
financial statements, and a deferred income tax liability or asset is recognized
for temporary differences between our financial statements and tax returns.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred assets and
liabilities of a change in tax rate is recognized in the statement of operations
in the period that includes the enactment date.

A valuation allowance has been provided to reduce the deferred tax assets, based
on management's estimate of the assets' realizibility. Management believes it is
more likely than not that the deferred tax assets will not be realized in the
foreseeable future. Therefore, the Company increased the valuation allowance in
June 2004 to fully allow for the deferred tax assets at June 30, 2004.

CONTRACTUAL OBLIGATIONS

In March 2004, the Company closed on $5,000,000 of convertible promissory notes
(the "Notes") with two financial institutions (the "Lenders"). The Notes carry a
stated interest rate of 7% per annum and have a 45-month term. Interest only
payments are due April 2004 through June 2004. Beginning in July 2004, principal
and interest payments will amortize over the remaining 42-month period. The
Notes are senior to all other debt of the Company and are collateralized by all
assets of Chex and the Company's stock ownership in Chex.





                                       32
<PAGE>

                                   ITEM THREE
             QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates
and prices, such as interest rates and a decline in the stock market. The
Company does not enter into derivatives or other financial instruments for
trading or speculative purposes. The Company has limited exposure to market risk
related to changes in interest rates. The Company does not currently invest in
equity instruments of public or private companies for business or strategic
purposes.

The principal risks of loss arising from adverse changes in market rates and
prices to which the Company and its subsidiaries are exposed relate to interest
rates on debt. The Company has both fixed and variable rate debt. Chex has
$14,936,719 and $10,931,147 of debt outstanding as of June 30, 2004 and December
31, 2003, respectively, of which $10,217,677 and $10,692,177 has been borrowed
at fixed rates ranging from 10% to 12% at June 30, 2004 and December 31, 2003,
respectively. This fixed rate debt is subject to renewal annually and is payable
upon demand with 90 days written notice by the debt holder. Additionally,
$4,355,395 of the total debt at June 30, 2004 has a fixed rate of 7% and
$300,000 of the total debt at June 30, 2004 has a fixed rate of 5%. Chex also
has $63,107 and $238,970 of variable rate debt at March 31, 2004 and December
31, 2003, respectively, owed to a bank. The lender presently charges interest at
0.5% to 0.75% over the prime rate.

As most of the Company's average outstanding indebtedness is renewed annually
and carries a fixed rate of interest, a change in interest rates is not expected
to have a material impact on the consolidated financial position, results of
operations or cash flows of the Company during the year ending December 31,
2004.



                                       33
<PAGE>

                                    ITEM FOUR
                       DISCLOSURE CONTROLS AND PROCEDURES

A review and evaluation was performed by the Company's management, including the
Company's Chief Executive Officer (the "CEO")/Chief Financial Officer (the
"CFO"), of the effectiveness of the design and operation of the Company's
disclosure controls and procedures within 90 days prior to the filing of this
quarterly report. Based on that review and evaluation, the CEO/CFO has concluded
that the Company's current disclosure controls and procedures, as designed and
implemented, were effective. There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
the Company's internal controls subsequent to the date of their evaluation.
There were no significant material weaknesses identified in the course of such
review and evaluation and, therefore, no corrective measures were taken by the
Company.


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        None.

Item 2. Changes in Securities

        None

Item 3. Defaults upon Senior Securities

        None.

Item 4. Submission of Matters to a Vote of Security Holders

        None.

Item 5. Other Information

        None.

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits

        Exhibit 31 - Certification pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002

        Exhibit 32 - Certification pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002

        (b) Reports on Form 8-K during the quarter ended June 30, 2004

        On April 1, 2004, the Company filed an 8-K disclosing a press release
        issued on March 31, 2004 announcing the commencement of four lawsuits
        with iGames Entertainment, Inc.

        On April 16, 2004, the Company filed an 8-K disclosing a press release
        issued on April 15, 2004 announcing that the Company had executed a
        definitive agreement with Seven Ventures, Inc. to sell its ownership in
        Chex Services, Inc.

        On June 18, 2004, the Company filed an 8-K disclosing a press release
        issued on June 8, 2004 announcing the closing of the Company's sale of
        Chex Services, Inc. to Seven Ventures, Inc.


                                       34
<PAGE>

                                   SIGNATURES

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

                                      Equitex, Inc.
                                      (Registrant)

Date: August 23, 2004                 By: /s/ Henry Fong
                                          -------------------------------------
                                          Henry Fong
                                          President, Treasurer and
                                          Chief Financial Officer



                                       35