<PAGE>

                        SECURITES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------

                                    FORM 10-Q

(Mark One)

(X)      Quarterly report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

         FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

( )      Transition report under Section 13 or 15(d) of the Exchange Act

         For the transition period from _________________ to __________________

                         Commission file number: 0-21633


                         BRISTOL RETAIL SOLUTIONS, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)


               DELAWARE                                   58-2235556
   (State or Other Jurisdiction of             (IRS Employer Identification NO).
    Incorporation or Organization)

  1437 S JACKSON, SEATTLE, WASHINGTON                       98144
(Address of Principal Executive Offices)                  (Zip code)


                                 (206) 325-8922
                (Issuer's Telephone Number, Including Area Code)

              3760 KILROY AIRPORT WAY, LONG BEACH, CALIFORNIA 90806
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

      Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X]  No [ ]

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

      Common Stock, $.001 par value - 8,376,968 shares as of May 4, 2001 Class A
      Redeemable Common Stock Purchase Warrants - 1,733,791 as May 4, 2001

      Transitional Small Business Disclosure Format (check one):
Yes [ ]  No [X]

<PAGE>

                         BRISTOL RETAIL SOLUTIONS, INC.

                                      Index


Part I   --- FINANCIAL INFORMATION                                         Page

         Item 1.  Financial Statements (Unaudited)

              Consolidated Balance Sheets as of March 31, 2001 and
                December 31, 2000                                           3

              Consolidated Statements of Operations for the three
                months ended March 31, 2001 and 2000                        4

              Consolidated Statements of Cash Flows for the three
                months ended March 31, 2001 and 2000                        5

              Notes to Consolidated Financial Statements                   6-11

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                     12-15

         Item 3.  Quantitative and Qualitative Disclosures about
                  Market Risk                                               16

Part II  --- OTHER INFORMATION

         Item 1.  Legal Proceedings                                         17
         Item 2.  Changes in Securities and Use of Proceeds                 17
         Item 3.  Defaults upon Senior Securities                           17
         Item 4.  Submission of Matters to a Vote of Security Holders       17
         Item 5.  Other Events                                              17
         Item 6.  Exhibits and Reports on Form 8-K                          17

Signature                                                                   18

                                       2
<PAGE>

<TABLE>
                                           BRISTOL RETAIL SOLUTIONS, INC.
                                            CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                                     MARCH 31, 2001    DECEMBER 31,
                                                                                       (UNAUDITED)         2000
                                                                                      -------------   -------------
<S>                                                                                   <C>             <C>
                                        ASSETS
Current assets:
    Cash and cash equivalents                                                         $    202,138    $    477,509
    Accounts receivable, net of allowance for doubtful accounts of $702,276
       and $600,061                                                                      2,309,546       2,964,796
    Inventories, net                                                                     3,366,771       3,480,693
    Prepaid expenses and other current assets                                              389,140         277,687
    Current portion of note receivable                                                     160,201         144,172
                                                                                      -------------   -------------
Total current assets                                                                     6,427,796       7,344,857
    Property and equipment, net                                                            384,118         425,707
    Intangible assets, net of accumulated amortization of $1,154,583
      and $1,085,431                                                                     3,926,417       3,995,569
    Note receivable;less current portion                                                         0          16,029
    Other assets                                                                           154,708         128,651
                                                                                      -------------   -------------
Total assets                                                                          $ 10,893,039    $ 11,910,813
                                                                                      =============   =============

        LIABILITIES,  REDEEMABLE PREFERRED STOCK  AND STOCKHOLDERS' DEFICIT
Current liabilities:
    Short-term borrowings                                                             $  1,823,168    $  2,350,655
    Accounts payable                                                                     3,154,088       4,263,890
    Accrued salaries, wages and related benefits                                           347,459         694,383
    Accrued expenses                                                                       407,418         256,673
    Deferred service revenue                                                             1,472,743       1,618,055
    Customer advances                                                                      542,739         599,191
    Current portion of note payable to related party                                     2,002,063         850,000
    Current portion of long-term debt                                                    1,191,050         210,975
    Redeemable Warrants associated with Series C Redeemable Preferred Stock                387,965         216,750
    Current portion of capital lease obligations                                            40,485          53,893
                                                                                      -------------   -------------
Total current liabilities                                                               11,369,178      11,114,465

    Capital lease obligation,  less current portion                                         66,549          72,407
                                                                                      -------------   -------------
Total liabilities                                                                       11,435,727      11,186,872
Commitments and contingencies (Note 9)
Series C Redeemable Preferred Stock; $.001 par value, 4,000,000 shares authorized;       1,000,000       1,000,000
     500,000 shares issued and outstanding
 Stockholders' deficit:
    Series B Preferred Stock; $1.00 par value; 1,000,000 shares authorized;
     500,000 shares issued; 25,000 and 400,000 shares outstanding                           25,000          25,000
   Common stock, $.001 par value: 20,000,000 shares authorized; 8,376,968 and
      8,376,968 shares issued ;  8,371,968 and 8,371,968  shares outstanding                 8,377           8,377
    Additional paid-in-capital                                                          13,759,898      13,759,898
    Accumulated deficit                                                                (15,311,338)    (14,044,709)
                                                                                      -------------   -------------
                                                                                        (1,518,063)       (251,434)
Treasury stock, 5,000 shares, at cost                                                      (24,625)        (24,625)
                                                                                      -------------   -------------
Total stockholders' deficit                                                             (1,542,688)       (276,059)
                                                                                      -------------   -------------
Total liabilities, redeemable preferred stock and stockholders' defict                $ 10,893,039    $ 11,910,813
                                                                                      =============   =============

                            See accompanying notes to consolidated financial statements.

                                                         3
</TABLE>
<PAGE>

<TABLE>
                                  BRISTOL RETAIL SOLUTIONS, INC.
                              CONSOLIDATED STATEMENTS OF OPERATIONS

                                           (Unaudited)
<CAPTION>

                                                                     Three Months Ended March 31
                                                                    -----------------------------
                                                                        2001             2000
                                                                    -----------------------------
<S>                                                                 <C>              <C>
Revenue:
System sales and installation                                       $ 2,627,345      $ 4,078,235
Service and supplies sales                                            1,910,238        2,065,776
                                                                    ------------     ------------
Total revenue                                                         4,537,583        6,144,011
                                                                    ------------     ------------
Cost of revenue:
System sales and installation                                         2,411,030        3,440,727
Service and supplies sales                                            1,129,058        1,612,921
                                                                    ------------     ------------
Total cost of revenue                                                 3,540,088        5,053,648
                                                                    ------------     ------------

Gross margin                                                            997,495        1,090,363
                                                                    ------------     ------------
Operating expenses:
           Selling, general and administrative expenses               1,900,375        2,179,583
                                                                    ------------     ------------
Total operating expenses                                              1,900,375        2,179,583
                                                                    ------------     ------------

Operating loss                                                         (902,880)      (1,089,220)

Other income (expense), net                                            (333,749)        (130,772)
                                                                    ------------     ------------

Loss before income taxes                                             (1,236,629)      (1,219,992)
Provision for income tax                                                      -                -
                                                                    ------------     ------------

Net loss                                                            $(1,236,629)     $(1,219,992)
                                                                    ============     ============


Net loss                                                            $(1,236,629)     $(1,219,992)

Preferred stock accretion and dividends                                 (30,000)        (368,034)
                                                                    ------------     ------------

Net loss applicable to common stockholders                          $(1,266,629)     $(1,588,026)
                                                                    ============     ============

Basic and diluted net loss to common stockholders per share         $     (0.15)     $     (0.23)
                                                                    ============     ============
Basic and diluted weighted average common shares outstanding          8,371,968        6,963,282
                                                                    ============     ============

                  See accompanying notes to consolidated financial statements.

                                                4
</TABLE>
<PAGE>

<TABLE>
                                  BRISTOL RETAIL SOLUTIONS, INC.
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                           (Unaudited)
<CAPTION>

                                                                     Three Months Ended March 31
                                                                    -----------------------------
                                                                        2001             2000
                                                                    -----------------------------
<S>                                                                 <C>              <C>
Cash flows from operating activities:
Net loss                                                            $(1,236,629)     $(1,219,992)
Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation                                                        40,872           52,765
     Amortization                                                        69,152          105,034
     Provision for doubtful accounts                                     88,385           23,402
     Redeemable warrants                                                171,215                -
     Changes in operating assets and liabilities, net of
       effect of acquisitions and business dispositions
         Accounts receivable                                            566,865        1,273,324
         Inventories                                                    113,922            4,900
         Prepaid expenses and other assets                             (137,510)         (50,221)
         Accounts payable                                               287,954           79,319
         Other accrued expenses                                        (226,179)        (546,622)
         Deferred service revenue                                      (145,312)         292,055
         Customer advances                                              (56,452)         (33,267)
         Accrued interest                                                42,563                -
                                                                    -----------------------------
Net cash used in operating activities:                                 (421,154)         (19,303)

Cash flows from investing activities:
Receivables from rescinded acquisition                                        -           15,000
Disposal of property and equipment                                          717                -
Purchases of property and equipment                                           -           (3,911)
                                                                    -----------------------------
Net cash provided by  investing activities                                  717           11,089

Cash flows from financing activities:
Repayment of capital lease obligations                                  (19,266)         (14,998)
Issuance (repayment) of note payable to related party                 1,110,000           (9,280)
Net borrowings (repayment) on line of credit                           (527,487)        (497,223)
Issuance (repayment) of long-term debt                                 (418,181)          (3,921)
Issuance of preferred stock, net of offering costs                            -          920,000
Redemption of preferred stock                                                 -         (300,000)
Payment of cash dividends-preferred stock                                     -          (25,940)
                                                                    -----------------------------
Net cash provided by financing activities                               145,066           68,638

Net increase (decrease) in cash and cash equivalents                   (275,371)          60,424
Cash and cash equivalents at beginning of year                          477,509          332,959
                                                                    -----------------------------
Cash and cash equivalents at end of year                            $   202,138      $   393,383
                                                                    =============================

Supplemental disclosures of cash flow information:
Cash paid for interest                                              $   133,706      $   126,251

Supplemental disclosure of non-cash investing and
  financing activities:
Preferred stock accretion                                                     -          334,056
Conversion of accounts payable to notes payable                       1,397,756                -
Dividend payable on Series C Preferred Stock                             30,000                -

                  See accompanying notes to consolidated financial statements.

                                                5
</TABLE>
<PAGE>

                         BRISTOL RETAIL SOLUTIONS, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)
                                 March 31, 2001


NATURE OF OPERATIONS AND BASIS OF PRESENTATION

         Bristol Retail Solutions, Inc. (the Company) was incorporated on April
3, 1996 in the state of Delaware for the purpose of acquiring and operating a
national network of full-service retail automation solution providers. The
Company earns revenue from the sale and installation of point-of-sale (POS)
systems and turnkey retail automation (VAR) systems, the sale of supplies and
from service fees charged to customers under service maintenance agreements.
Currently, the Company has sales and service locations located in nine cities
and five states, primarily located in the Western and Midwestern region of the
United States.

         The accompanying consolidated March 31, 2001 and 2000 financial
statements include the accounts of the Company and its wholly-owned
subsidiaries: Cash Registers, Inc. (CRI), which includes MicroData, Inc.
(MicroData) and Electronic Business Machines, Inc. (EBM); Automated Retail
Systems, Inc. (ARS); Smyth Systems, Inc. (Smyth); Pacific Cash Register and
Computer, Inc. (PCR); and Quality Business Machines (QBM).

         The accompanying consolidated financial statements have been prepared
by the Company without audit in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. The
accompanying consolidated financial statements do not include certain notes and
financial presentations normally required under accounting principles generally
accepted in the United States of America and, therefore, should be read in
conjunction with the audited consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year.

GOING CONCERN

         The Company has experienced recurring net operating losses and has a
tangible net worth and capital deficiency. Further, the Company has been unable
to raise adequate capital to fulfill its bank loan agreements and its
obligations to its trade creditors. For the quarter ended March 31, 2001, the
Company incurred losses applicable to common stockholders of approximately $1.2
million and had a working capital deficit of approximately $4.9 million. The
Company also has borrowed $1,910,000 from Registry Magic Incorporated (Registry)
through May 15, 2001, to fund current operations and is contemplating a merger
with Registry. Registry is also experiencing financial difficulties and
Registry's independent auditors issued a report on its July 31, 2000 financial
statements that included an explanatory paragraph referring to substantial doubt
about Registry's ability to continue as a going concern. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The Company's success is dependent upon its ability to obtain necessary
financing, the continued cooperation of suppliers and equipment manufacturers,
the successful execution of management's cost reduction initiatives and the
achievement of sustained profitable operations. The Company in late 3rd quarter
of 2000 implemented a significant reduction in workforce and sold two sales
offices resulting in a reduction of fixed operating expenses of approximately
$800,000 per quarter. Additional reductions in operating costs are being
implemented in 2001 with expected cost reductions of $475,000 per quarter.
Management believes by effectively consolidating technical operations,
converting remote field office to support of sales only, incorporating a new
incentive based salesman compensation package and the completion of the
consolidation of financial services support will result in a significant
reduction in annual operating expenses and improve financial results while
maintaining required customer support and service levels. Management intends to
continue to seek additional debt and equity financing and to refinance the
Company's existing line of credit so that adequate cash flows are available
until the Company achieves profitable operations. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

                                       6
<PAGE>

INCOME TAXES

         The Company provides for income taxes in interim periods based on the
estimated effective income tax rate for the complete year. For the three months
ended March 31, 2001 and 2000, the estimated effective income tax rate is less
than the U.S. statutory rate primarily due to a 100% valuation allowance
provided against the deferred tax assets that arose from the current operating
loss.

BASIC AND DILUTED PER SHARE INFORMATION

         Basic net income (loss) per share is computed using the weighted
average number of common shares outstanding during the periods presented.
Diluted net income (loss) per share is computed using the weighted average
number of common and common equivalent shares outstanding during the periods
presented assuming the exercise of the Company's stock options and warrants and
preferred stock dividends on Series B and Series C Preferred Stock. Common
equivalent shares have not been included where inclusion would be antidilutive.

         At March 31, 2001 and 2000, basic and diluted loss per share is based
on the weighted average number of common shares outstanding and net loss
applicable to common stockholders. Common stock equivalents, which consist of
stock options, warrants and conversion of preferred stock, were antidilutive for
the three months ended March 31, 2001 and 2000, and, accordingly, were not
included in the calculation of dilutive loss per share.

<TABLE>
<CAPTION>
BASIC AND DILUTED LOSS PER SHARE                     Net Loss       Wt Shares      Per-Share
                                                   (Numerator)    (Denominator)     Amount
                                                  ------------------------------------------
<S>                                               <C>                <C>           <C>
FOR THE QUARTER  ENDED MARCH 31, 2000
Net loss                                          $(1,219,992)
Accretion related to  Preferred Stock                (334,056)
Cumulative dividends for  Preferred Stock             (33,978)
                                                  ------------

BASIC LOSS TO COMMON STOCKHOLDERS PER SHARE       $(1,588,026)       6,963,282     $  (0.23)

Effect of Dilutive Securities                               -                -            -
                                                  ------------------------------------------

DILUTED LOSS TO COMMON STOCKHOLDERS PER SHARE     $(1,588,026)       6,963,282     $  (0.23)
                                                  ==========================================

FOR THE QUARTER  ENDED MARCH 31, 2001
Net loss                                          $(1,236,629)
Accretion related to  Preferred Stock                       -
Cumulative dividends for  Preferred Stock             (30,000)
                                                  ------------

BASIC LOSS TO COMMON STOCKHOLDERS PER SHARE       $(1,266,629)       8,371,968     $  (0.15)

Effect of Dilutive Securities                               -                -            -
                                                  ------------------------------------------

DILUTED LOSS TO COMMON STOCKHOLDERS PER SHARE     $(1,266,629)       8,371,968     $  (0.15)
                                                  ==========================================
</TABLE>
                                       7
<PAGE>

COMPREHENSIVE OPERATIONS

         SFAS No. 130, "Reporting Comprehensive Income" establishes standards
for the reporting of comprehensive income and its components. Comprehensive
income, as defined, includes all changes in equity (net assets) during a period
from transactions and other events and circumstances from nonowner sources. As
of March 31, 2001 and 2000, there is no difference between net loss and
comprehensive loss.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998,the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FAS No. 133", which is effective for financial statements for
all fiscal quarters of all fiscal years beginning after June 15, 2000.SFAS No.
133 standardizes the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, by requiring that an entity
recognize those items as assets or liabilities in the statement of financial
position and measure them at fair value. SFAS No, 133 also addresses the
accounting for hedging activities. The Company adopted SFAS No. 133 effective
January 1, 2001. The adoption of SFAS No. 133 did not have any impact on the
Company's financial statement presentation or disclosures.

Effective January 1, 2000, the Company's accounting policies were reviewed for
compliance with the guidelines provided by Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 provides the
Securities and Exchange Commission's views in applying generally accepted
accounting principles to revenue recognition in the financial statements. The
Company recognizes revenue for systems sales upon shipment and completed
installation at which time there are no other significant vendor obligations.
Hardware sales are recognized as revenue upon shipment and passage of title as
there are no other significant vendor obligations. Training and other services
are recognized as revenue when such items are delivered. Revenue from
maintenance contracts is recognized ratably over the term of the agreement.

 In September 2000, the Emerging Issues Task Force ("EITF") issued EITF 00-10,
"Accounting for Shipping and Handling Fees and Costs". Under the provisions of
EITF 00-10, amounts billed to a customer in a sales transaction related to
shipping and handling should be classified as revenue. EITF 00-10 also requires
the disclosure of the income statement classification of any shipping and
handling costs. The Company was in compliance with EITF 00-10 for the year ended
December 31, 2000. The adoption resulted in no impact on the classification of
revenue for the Company and had no impact on the determination of net income.

In March 2000, the EITF reached a consensus on the application of EITF Issue No.
96-13, "Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock", with Issue No. 00-7, "Equity
Derivative Transactions that Require Net Cash Settlement if Certain Events
Outside the Control of the Issuer Occur" ("EITF 00-7"). Equity derivative
contracts that contain any provision that could require net cash settlement
(except upon the complete liquidation of the Company) must be marked to fair
value through earnings under EITF 00-7. In September 2000, the EITF reached a
consensus on Issue No.00-19, "Determination of Whether Share Settlement Is
Within the Control of the Issuer for Purposes of Applying Issue No. 96-13,
"Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Company's Own Stock" ("EITF 00-19"). EITF 00-19 addresses
questions regarding the application of EITF 00-7 and sets forth a model to be
used to determine whether equity derivative contracts should be recorded as
equity. Under the transition provisions of EITF 00-19, all contracts existing
prior to the date of the consensus are grandfathered until June 30, 2001, with a
cumulative catch-up adjustment to be recorded at that time. Additionally, any
contracts entered into prior to September 20, 2000, which are not revised to
comply with the requirements of EITF 00-19 by December 31, 2000, will require
reclassification out of permanent equity and into temporary equity pursuant to
Accounting Series Release No. 268. This reclassification will remain until the
contracts are revised to comply with EITF 00-19 through June 30, 2001. The
Company believes that the equity derivative contracts that may remain
outstanding at June 30, 2001, if any, will be in accordance with the
requirements of EITF 00-19 and does not anticipate that such adoption will have
a material impact on the consolidated financial statements.

                                       8
<PAGE>

In May 2000, the EITF reached a consensus on EITF 00-14, "Accounting for Certain
Sales Incentives", which provides guidance on accounting for discounts, coupons,
rebates and free products, as well as the income statement classification of
these discounts, coupons, rebates and free products. EITF 00-14 is effective
April 1, 2001, for the Company. The Company believes that such adoption will not
have a material impact on the consolidated financial statements.

In March 2000, the FASB issued interpretation No 44, "Accounting for Certain
Transactions Involving Stock Compensation, the Interpretation of APB Opinion No.
25" (FIN 44). The interpretation is intended to clarify certain problems that
have arisen in practice since issuance of APB No. 25, "Accounting for Stock
Issued to Employees." The effective date of the interpretation was July 1, 2000.
The provisions of the Interpretation apply prospectively, but they will also
cover certain events occurring after December 15, 1998 and after January 12,
2000. The adoption of FIN 44 did not have a material effect on the Company's
consolidated financial statements.

RECLASSIFICATION

         Certain reclassifications have been made to prior period information to
conform to the current period presentation.


PROPERTY AND EQUIPMENT
Property and equipment consists of the following:

                                                       March 31,    December 31,
                                                         2001          2000
                                                      ----------    ----------

Furniture and equipment                               $ 479,146     $ 479,862
Automobiles                                             212,672       212,672
Leasehold improvements                                  110,002       110,002
                                                      ----------    ----------
                                                        801,820       802,536
Less accumulated depreciation and amortization         (417,702)     (376,829)
                                                      ----------    ----------
Property and equipment, net                           $ 384,118     $ 425,707
                                                      ==========    ==========
VENDOR NOTES PAYABLE

During the three months ended March 31, 2001 the Company converted the accounts
payable balances of two equipment suppliers to notes payable. $672,326 was
converted with an interest rate of 9.5% and monthly payments of $87,062.29, and
$715,135 was converted with an interest rate of 16% and monthly payments of
$60,000.

COMMITMENTS AND CONTINGENCIES

         The Board of Directors at the February 5, 2001 meeting approved,
subject to certain conditions, granting Lawrence Cohen One Million (1,000,000)
additional Bristol Common Stock Options.

         The Company's subsidiaries have been, from time to time, parties to
various lawsuits and other matters involving ordinary and routine claims arising
in the normal course of business. In the opinion of management of the Company,
although the outcomes of these claims and suits are not presently determinable,
in the aggregate, the outcome of any of these matters will not have a material
adverse affect on the Company's business, financial position or results of
operations or cash flows.

                                       9
<PAGE>

         On or about August 7, 1997, a class action complaint was filed against
the Company and certain of the Company's officers and directors. Underwriters
for the Company's initial public offering were also named as defendants. The
class action plaintiffs are Lincoln Adair, Antique Prints, Ltd., and Martha
Seamons, on behalf of themselves and all others similarly situated. In addition
to seeking to have themselves declared proper plaintiffs and having the case
certified as a class action, plaintiffs were seeking unspecified monetary
damages. The plaintiffs' complaint alleged claims under the federal securities
laws for alleged misrepresentations and omissions in connection with sales of
the Company's securities. On December 23, 1997, the Company filed a motion to
dismiss the complaint, and on May 14, 1998, the court denied the Company's
request. On May 3, 1999, the Company and the plaintiffs agreed to settle the
class action complaint against the Company and a stipulation has been filed with
the United States District Court, Southern District of New York (the Court). The
Company has insurance that will cover the claim except for a deductible of
$250,000 less attorney fees. During the twelve months ended December 31, 2000,
the Company dispersed all $100,000 reducing the provision to $0. Currently, the
settlement money from the insurance company is in a trust fund. Final
disposition of funds to the plaintiffs will occur when the Company pays the
money owed as agreed to per the settlement.

STOCKHOLDERS' EQUITY

     PREFERRED STOCK

          On January 12, 2000, the Company and Berthel SBIC, LLC (Berthel)
entered into an Investment Agreement whereby the Company issued 500,000 shares
of its Series C Convertible Preferred Stock (the Series C) and a warrant to
purchase 425,000 shares of its common stock for $920,000, net of offering costs.
The warrant has an exercise price per share of $0.01 and is exercisable until
January 12, 2005. In connection with the purchase price by Berthel, the Company
and the Chairman of the Board, Larry Cohen agreed to surrender, without
exercise, options held by him for the acquisition of 1,330,000 shares of common
stock of the Company, at which time the Company cancelled the options

          Upon certain circumstances, Berthel may put to the Company the warrant
or shares underlying the warrant and shares of common stock resulting from the
conversion of all or part of the Series C Preferred Stock. The Company will pay
Berthel a put price equal to the fair market value of the Company, multiplied by
a fraction, the numerator of which is the total of (i) the number of warrant
shares tendered by Berthel, (ii) the number of shares of common stock for which
the portion of the warrant tendered by Berthel remains exercisable, (iii) the
number of conversion shares tendered by Berthel and (iv) the number of shares of
common stock for which the Series C Preferred Stock tendered by Berthel remain
convertible; and the denominator of which is the total of (x) the total shares
of outstanding common stock of the Company, (y) the number of shares of common
stock for which the warrant remains exercisable, and (z) the number of
conversion shares for which all shares of Series C Preferred Stock held by
Berthel remain convertible. Berthel may exercise it rights to this put at any
time after the fifth anniversary of the closing date and prior to the close of
business on the seventh anniversary of the closing date unless certain events as
defined occur earlier. In addition, at any time after the closing date, the
investor may demand registration of its shares of common stock on Form S-2 or
S-3 or any similar short form registration.

         The holder of the Series C Preferred Shares is entitled to receive
cumulative cash dividends at the rate of $0.24 per year per share, payable
quarterly no later than the last business day of each March, June, September and
December. The Company recorded dividends of $30,000 as of March 31, 2001.

         The purchaser received warrants to purchase 425,000 shares of common
stock. These warrants were valued by the Company at $216,750, using a
Black-Scholes option-pricing model. Pursuant to antidilutive terms of the
agreement, the Company issued warrants to purchase an additional 39,979 shares
of common stock on August 21, 2000. The Series C Preferred Stock was recorded at
fair value on the date of issuance less issuance costs. The Company recorded
accretion of $354,056 to increase the carrying value to the redemption value of
$1,000,000.

         Using a Black-Scholes option-pricing model, the Company valued the
464,979 warrants at $387,965, recording interest expense of $171,215 in
accordance with ("EITF 00-07") at March 31, 2001.

                                       10
<PAGE>

SUBSEQUENT EVENTS

         Subsequent to the period covered by this report, Bristol filed a
current report on Form 8-K, announcing the resignation of Mr. David Kaye as an
officer and director of the Company, effective April 16, 2001. This report was
filed on April 25, 2001

         On May 10, 2001 the Company filed an amended joint proxy/registration
statement on Form S-4 related to the proposed merger with Registry Magic. Under
the terms of the agreement, common shareholders of Bristol would receive .65
shares of Registry common stock. A shareholder's meeting has been scheduled for
June 19, 2001.

                                       11
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 MARCH 31, 2001

         The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto included elsewhere in this
Quarterly Report on Form 10-Q, as well as the Company's audited consolidated
financial statements for the year ended December 31, 2000.

         This Quarterly Report on Form 10-Q contains forward-looking statements
that involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Additional Factors That May Affect Future
Results."

REVENUE

         The Company's consolidated total revenue is comprised of two
components: (i) revenue derived from the sale and installation of hardware and
software (Systems Revenue) and (ii) revenue derived from the sale of services
and supplies (Service Revenue).

         Total revenue for the quarter ended March 31, 2001 was $4,537,583 and
represents a decrease of 26% from the Company's total revenue of $6,144,011 for
the quarter ended March 31, 2000. The decrease in revenue from the quarter ended
March 31, 2001 to the quarter ended March 31, 2000 was attributable to a decline
in franchise hospitality revenue due to premature conversions attributable to
Y2K and the absence of revenues from the London, Kentucky and Dayton, Ohio sales
offices, which were sold in August of 2000.

         Total revenue for the quarter ended March 31, 2001 was comprised of 58%
Systems Revenue and 42% Service Revenue, as compared to a revenue composition of
66% Systems Revenue and 34% Service Revenue for the quarter ended March 31,
2000.

         No customer accounted for more than 10% of total revenue for the three
months ended March 31, 2001 and 2000. Aggregate sales of products from the
Company's three principal hardware vendors, Panasonic, ERC Parts, Inc. (ERC), a
distributor of Panasonic products, and NCR Corporation (NCR), accounted for
approximately 26% of total revenue for the quarter ended March 31, 2001 and
approximately 20% of total revenue the quarter ended March 31, 2000. The
Company's supply agreements with these manufacturers are non-exclusive, have
geographic limitations and may have renewable one-year terms depending upon the
Company's achievement of a previously agreed to procurement quota. The Company
believes it will achieve its' procurement goals with each of it's major
suppliers. Geographical limitations exist as a result of the assignment of sales
territories that define the municipalities and states where the Company's
subsidiaries can sell a manufacture's hardware or software. The actual sales
territories for each manufacturer are subsidiary-specific and some subsidiaries
may not have permission to sell hardware or software of certain manufacturers in
certain regions or territories of the country. NCR, however, effective January
1, 2001 eliminated the Company's geographical limitations, thereby allowing the
Company to sell NCR products throughout the country. A change in the Company's
or its subsidiaries' relationship with its principal vendors could have a
material adverse effect on the Company's business, financial condition, results
of operations and cash flows.

GROSS MARGIN

         Gross margin decreased to $997,495 for the quarter ended March 31,
2001, from $1,090,363 for the quarter ended March 31, 2000. As a percentage of
sales, gross margin for the quarter ended March 31, 2001 was 22% and was
comprised of gross margin for Systems Revenue of 8% and gross margin for Service
Revenue of 41%. Gross margin for the quarter ended March 31, 2000 was 18% and
was comprised of gross margin for Systems Revenue of 16% and gross margin for
Service Revenue of 22%. The decrease in systems gross margin is primarily
attributable to decreased revenue available to cover fixed labor and overhead
that are components of cost of sales. The increase in service gross margins is
due to overall fixed labor costs decreasing faster than a decline in service
revenue from prior year.

                                       12
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Total selling, general and administrative expenses were $1,900,375 for
the quarter ended March 31, 2001, a decrease of $279,208 from the comparable
prior-year period and represented 42% of total revenue, versus 36% of total
revenue in the comparable prior year period. The decrease in expenses in
absolute dollars between years was primarily attributable to the sale of the two
Cash Registers, Inc. offices, and other workforce reductions.

OTHER EXPENSE (INCOME)

         The Company earned interest income of $1,547 for the three- month
period ended March 31, 2001, compared to $11,071 for the quarter ended March 31,
2000. Interest income primarily related to finance charges earned on delinquent
accounts. The Company recognized interest expense of $337,467 for the quarter
ended March 31, 2001 compared to $138,905 for the quarter ended March 31, 2000.
Interest expense in both years consisted primarily of interest on outstanding
balances on the Company's lines of credit, amortization of debt issuance costs,
and the revaluation of redeemable warrants.

INCOME TAX PROVISION

         The Company recorded a slight income tax provision for the quarters
ended March 31, 2001 and 2000, respectively. Income tax expense in both years
consisted solely of state taxes as the Company had a taxable loss for federal
income tax purposes and provided a 100% valuation allowance on the deferred tax
asset created by the taxable losses as management estimated these taxable losses
could not meet the more likely than not recoverability standard imposed by SFAS
No. 109.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

         The Company's net loss applicable to common stockholders for the
quarter ended March 31, 2001 was $1,266,629, consisting of the Company's net
loss of $1,236,629 and dividends on preferred stock of $30,000.

         The Company's net loss applicable to common stockholders for the
quarter ended March 31, 2000 was $1,588,026, consisting of the Company's net
loss of $1,219,992, cumulative dividends on the Preferred Stock of $33,978 and
accretion of $334,056 related to Series C Convertible Preferred Stock.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

         The Company had cash and cash equivalents of $202,138 at March 31,
2001. During the three months ended March 31, 2001, the Company utilized
$421,154 of cash from operations; utilized $717 for the disposal of property and
equipment and generated $145,066 from financing activities, which primarily
related to borrowings from a related party (Registry) and conversion of accounts
payables to note payable. As of March 31, 2001 the Company was in arrears on one
of the vendor notes, however, they have been negotiating with the note holders
for more favorable payment terms. As of May 15, 2001 those negotiations were
continuing and there had been no significant interruptions in product delivery
as a result of the late payments.

         On December 17, 1997, the Company obtained a line of credit which
provides for aggregate borrowings up to $5,000,000 computed based on eligible
accounts receivable and inventories; bears interest at the bank's prime rate
plus 1.75%; and matured on December 31, 2000; and is collateralized by the
Company's eligible accounts receivable and inventories. The Company successfully
negotiated an extension of the line of credit to May 31, 2001. Ineligible
accounts receivable includes any customer invoice that is ninety-days past due
or any customer account where 25% or more of the amount due is ninety-days
delinquent. Pursuant to the terms of the line of credit, the Company is subject
to covenants, which, among other things, impose certain financial reporting
obligations on the Company and prohibit the Company from engaging in certain

                                       13
<PAGE>

transactions prior to obtaining the written consent of the lender. The Company
had outstanding borrowings of $1,823,168 and $2,350,655 bearing interest at
10.75% and 9.50% at March 31, 2001 and 2000, respectively. As of March 31, 2001,
the Company was in compliance with the covenants under the credit facility. The
Company is currently negotiating to extend the maturity date to June 30, 2001
and is also in discussion with other prospective lenders to replace the current
credit line.

         The Company believes that the potential merger with Registry Magic,
detailed elsewhere in this document, will create a more attractive entity to the
capital markets and will afford additional funding opportunities other than
those that would have been available to either firm as separate entities. In
addition, pursuant to the terms of the merger agreement, the Company and
Registry entered into a promissory note whereby Registry has advanced $1,910,000
to the Company through May 15, 2001.

          On January 12, 2000, the Company and Berthel SBIC, LLC (Berthel)
entered into an Investment Agreement whereby the Company issued 500,000 shares
of its Series C Convertible Preferred Stock (the Series C) and a warrant to
purchase 425,000 shares of its common stock for $920,000, net of offering costs.
The warrant has an exercise price per share of $0.01 and is exercisable until
January 12, 2005. In connection with the purchase price by Berthel, the Company
and the Chairman of the Board, Larry Cohen agreed surrender, without exercise,
options held by him for the acquisition of 1,330,000 shares of common stock of
the Company, at which time the Company cancelled the options.

          Upon certain circumstances, Berthel may put the Company the warrant or
shares underlying the warrant and shares of common stock resulting from the
conversion of all or part of the Series C Preferred Stock. The Company will pay
Berthel a put price equal to the fair market value of the Company, multiplied by
a fraction, the numerator of which is the total of (i) the number of warrant
shares tendered by Berthel, (ii) the number of shares of common stock for which
the portion of the warrant tendered by Berthel remains exercisable, (iii) the
number of conversion shares tendered by Berthel and (iv) the number of shares of
common stock for which the Series C Preferred Stock tendered by Berthel remain
convertible; and the denominator of which is the total of (x) the total shares
of outstanding common stock of the Company, (y) the number of shares of common
stock for which the warrant remains exercisable, and (z) the number of
conversion shares for which all shares of Series C Preferred Stock held by
Berthel remain convertible. Berthel may exercise it rights to this put at any
time after the fifth anniversary of the closing date and prior to the close of
business on the seventh anniversary of the closing date unless certain events as
defined occur earlier. In addition, at any time after the closing date, the
investor may demand registration of its shares of common stock on Form S-2 or
S-3 or any similar short form registration. In accordance with Emerging Issues
Task Force (EITF) Issue No. 00-07, unless the underlying preferred stock
agreement is modified by June 30, 2000, the fair value of the Series C Preferred
Stock will be recorded as a liability with changes in its fair value recognized
in earnings.

         The holder of the Series C Preferred Shares are entitled to receive
cumulative cash dividends at the rate of $0.24 per year per share, payable
quarterly no later than the last business day of each March, June, September and
December. The Company recorded cumulative dividends of $30,000 as of March 31,
2001. The purchaser received warrants to purchase 425,000 shares of common
stock. These warrants were valued by the Company at $216,750 using a
Black-Scholes option-pricing model. The Series C Preferred Stock was recorded at
fair value on the date of issuance less issuance costs. The Company recorded
accretion of $354,056 to increase the carrying value to the redemption value of
$1,000,000.

          The Company believes that an additional capital infusion along with
its availability on the Company's current asset based line of credit is required
to meet its working capital requirements until December 31, 2001. At March 31,
2001, approximately $165,000 of eligible collateral was available for the
Company to borrow under the credit facilities. The Company will require
financing in order to fund the business operations and may incur additional
costs and expenditures to expand operational and financial systems and corporate
management and administration. The Company will be limited in its ability to
grow internally without working capital. There can be no assurance that the
Company will be able to successfully obtain additional financing or that such
financing will be available on terms the Company deems acceptable. In
anticipation of the proposed merger with Registry Magic, the Company has
borrowed from Registry Magic $1,910,000 through May 15, 2001 on an interest

                                       14
<PAGE>

bearing note at 11.5% for working capital. The Company's success is dependent
upon its ability to obtain necessary financing, the continued cooperation of
suppliers and equipment manufacturers, the successful execution of management's
cost reduction initiatives, and the achievement of sustained profitable
operations. The Company, in late 3rd quarter of 2000, implemented a significant
reduction in workforce and sold two sales offices resulting in a reduction of
fixed operating expenses of approximately $800,000 per quarter. Additional
reductions in operating costs are being implemented in 2001 with expected cost
reductions of $475,000 per quarter. Management believes by effectively
consolidating technical operations, converting remote field office to support of
sales only, incorporating a new incentive based salesman compensation package
and the completion of the consolidation of financial services support will
result in an further reduction in fixed annual operating expenses while
maintaining required customer support and service

LEGAL PROCEEDINGS

         The Company's exposure to litigation claims is discussed in Item 1.
Legal Proceedings and Commitments and Contingencies, Notes to the consolidated
financial statements.

         On or about August 7, 1997, a class action complaint was filed against
the Company and certain of the Company's officers and directors. Underwriters
for the Company's initial public offering were also named as defendants. The
class action plaintiffs are Lincoln Adair, Antique Prints, Ltd., and Martha
Seamons, on behalf of themselves and all others similarly situated. In addition
to seeking to have themselves declared proper plaintiffs and having the case
certified as a class action, plaintiffs were seeking unspecified monetary
damages. The plaintiffs' complaint alleged claims under the federal securities
laws for alleged misrepresentations and omissions in connection with sales of
the Company's securities. On December 23, 1997, the Company filed a motion to
dismiss the complaint, and on May 14, 1998, the court denied the Company's
request. On May 3, 1999, the Company and the plaintiffs agreed to settle the
class action complaint against the Company and a stipulation has been filed with
the United States District Court, Southern District of New York (the Court). The
Company has insurance that will cover the claim except for a deductible of
$250,000 less attorney fees. During the twelve months ended December 31, 2000,
the company dispersed all $100,000 reducing the provision to $0. Currently, the
settlement money from the insurance company is in a trust fund. Final
disposition of funds to the plaintiffs will occur when the Company pays the
money owed as agreed to per the settlement.

                                       15
<PAGE>

Item 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's financial instruments include cash and cash equivalents,
accounts receivable and accounts payable. At March 31, 2001, the carrying values
of the Company's financial instruments approximated fair values based on current
market prices and rates. Because of their short duration, changes in market
interest rates would not have a material effect on fair value.

         It is our policy not to enter into derivative financial instruments. We
do not currently have any significant foreign currency exposure, as we do not
transact business in foreign currencies. As such, we do not have significant
currency exposure at March 31, 2001.

                                       16
<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On or about August 7, 1997, a class action complaint was filed against
the Company and certain of the Company's officers and directors. There have been
no significant changes in these proceedings subsequent to the last notification.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5.  OTHER EVENTS


         Effective April 16, 2001 Mr. David Kaye resigned as President and
Director of the Company.

         On May 10, 2001 the Company filed an amended joint proxy/registration
statement on Form S-4 related to the proposed merger with Registry Magic. Under
the terms of the agreement, common shareholders of Bristol would receive .65
shares of Registry common stock. A shareholder's meeting has been scheduled for
June 19, 2001.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

                  99.1*    Risk Factors

                  * Filed herewith.

(b)      Reports on Form 8-K
         Subsequent to the period covered by this report, Bristol filed a
         current report on Form 8-K, announcing the resignation of Mr. David
         Kaye as an officer and director of the Company, effective April 16,
         2001. This report was filed on April 25, 2001.

                                       17
<PAGE>

                                    SIGNATURE

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   Bristol Retail Solutions, Inc.
                                   ---------------------------------------------
                                   (Registrant)

 May 21, 2001                      By: /s/ BILL KERECHEK
--------------                     ---------------------------------------------
     Date                          Bill Kerechek
                                   Chief Financial Officer
                                   (Principal financial and accounting officer)

                                       18