4:





FORM 10-QSB



QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE



For quarter ended February 28,
2002



|TAYCO DEVELOPMENTS,
      INC.                              
|------------------------------------------------------------
|(EXACT NAME OF REGISTRANT AS
      SPECIFIED IN ITS CHARTER)

|NEW YORK                                                             |  | 16-0835557                                   
|-------------------------------------------------------------------- |  | ---------------------------------------------
|(State or other Jurisdiction of
      incorporation or organization) |  | (I.R.S. Employer Identification
      Number)

|100 TAYLOR DRIVE, NORTH TONAWANDA, NEW
      YORK |  | 14120-0748
|------------------------------------------------- |  | ----------
|Address of Principal Executive
      Offices      |  | Zip
Code  

|Registrant's telephone number, including area code -
      716-694-0877
|-----------------------------------------------------------------------

Indicate by check mark whether the registrant
(1) has filed all annual, quarterly, and other reports required to be filed with
all the Commission and (2) has been subject to the filing requirements for at
least the past 90 days.

|Yes | X |  | No | 
|--- | - |  | -- | 



Indicate the number of shares outstanding, of
each of the Issuer's classes of common stock as of the close of the period
covered by this report.

|CLASS                                  |  | Outstanding at
      February 28, 2002
|-------------------------------------- |  | --------------------------------------
|Common Stock
      (5 cents par value) |  | 990,213                               







---

|TAYCO DEVELOPMENTS, INC.   
|---------------------------
|                           
|**Index****to Form 10-QSB**
|                           

|PART I                     | FINANCIAL
      INFORMATION |                                                                                                                                                       | PAGE
|-------------------------- | --------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                           |                             |                                                                                                                                                      
|                           | Item 1.                     | Financial
      Statements                                                                                                                           
|                           |                             |                                                                                                                                                      
|                           |                             | Balance Sheets as ofFebruary 28, 2002and May 31, 2001                                                                                                 | 3   
|                           |                             |                                                                                                                                                      
|                           |                             | Statements of Incomefor three months ended February 28, 2002 and March
      31, 2001, and nine months ended February 28, 2002 and March 31,
    2001 | 4   
|                           |                             |                                                                                                                                                      
|                           |                             | Statements of
      Cash Flows for nine months ended February 28, 2002 and March 31,
      2001                                                       | 5   
|                           |                             |                                                                                                                                                      
|                           |                             | Notes to
      Condensed Financial Statements                                                                                                         | 6   
|                           |                             |                                                                                                                                                      
|                           | Item 2.                     | Management's Discussion and Analysis of the
      Financial Condition and Results of Operations                                                       | 7   
|                           |                             |                                                                                                                                                      
|PART II                    | OTHER
      INFORMATION    
|                           | Item 1.                     | Legal
      Proceedings                                                                                                                               | 10  
|                           | Item
    2.                 | Changes in
      Securities                                                                                                                           | 10  
|                           | Item
    3.                 | Defaults
      Upon Senior Securities                                                                                                                 | 10  
|                           | Item
    4.                 | Submission
      of Matters to Vote of Security Holders                                                                                               | 10  
|                           | Item
    5.                 | Other
      Information                                                                                                                               | 10  
|                           | Item
    6.                 | Exhibits
      and Reports on Form 8-K                                                                                                                | 10  
|ACCOUNTANTS' REVIEW REPORT | 11                         
|SIGNATURES                 |                             | 12                                                                                                                                                   

---

|TAYCO DEVELOPMENTS, INC.                          
|--------------------------------------------------
|                                                  
|**Condensed Balance
      Sheets**                
|                                                  
|                                                  
|**Assets**                                        
|**Current assets:**                               
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|****Investments in
      affiliates, at equity    
|                                                  
|****Property and
      equipment, net             
|                                                  
|****Intangibles and
      other assets            
|                                                  
|                                                  
|                                                  
|******Liabilities and Stockholders'
      Equity**
|Current
      liabilities                         
|                                                  
|****Deferred income
      taxes                   
|                                                  
|******Stockholders'
      equity:**               
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  

*See notes to condensed
financial statements.*





---

|TAYCO DEVELOPMENTS,
      INC.              
|--------------------------------------------
|                                            
|Condensed Statements of
      Income        
|****                                        
|****                                        
|                                            
|****                                        
|****************Revenues:****               
|                                            
|****                                        
|****                                        
|****                                        
|**********Operating expenses:**             
|                                            
|****                                        
|****                                        
|****                                        
|****                                        
|                                            
|                                            
|****                                        
|******Provision for income taxes**          
|****                                        
|                                            
|                                            
|****                                        
|**Equity in net
      income of affiliates**
|****                                        
|                                            
|****                                        
|                                            







---

|****TAYCO
      DEVELOPMENTS, INC.****                              
|--------------------------------------------------------------------
|****                                                                
|****************Condensed Statements of Cash
      Flows            
|                                                                    
|                                                                    
|For the nine months ended
      February 28, 2002 and March 31, 2001
|****                                                                
|******************Cash flows from operating
      activities:**     
|                                                                    
|****                                                                
|                                                                    
|                                                                    
|****                                                                
|****                                                                
|                                                                    
|****                                                                
|****                                                                
|****                                                                
|****                                                                
|******************Cash flows from investing
      activities:**     
|                                                                    
|****                                                                
|****                                                                
|****                                                                
|                                                                    
|****                                                                
|****************Cash - beginning****                                
|****                                                                
|                                                                    



***See notes to condensed financial
statements.*****

---

|********TAYCO
      DEVELOPMENTS, INC.****                   
|-------------------------------------------------------------
|****                                                         
|****************Notes to Condensed Financial
      Statements
|                                                             

|****************1.**** | ****The accompanying unaudited condensed financial
      statements have been prepared in accordance with accounting principles
      generally accepted in the United States of America for interim financial
      information and with the instructions to Form 10-QSB and Regulation S-B.
      Accordingly, they do not include all of the information and footnotes
      required by accounting principles generally accepted in the United States
      of America for complete financial statements. In the opinion of the
      Company, the accompanying unaudited condensed financial statements contain
      all adjustments (consisting of only normal recurring accruals) necessary
      to present fairly the financial position as of February 28, 2002 and May
      31, 2001 and the results of operations and cash flows for the three and
      nine months ended February 28, 2002 and March 31, 2001. These financial
      statements should be read in conjunction with the audited financial
      statements and notes thereto contained in the Company's Annual Report to
      Shareholders for the eleven months ended May 31, 2001.
|---------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2.                     | There is no provision nor shall there be
      any provisions for profit sharing, dividends, or any other benefits of any
      nature at any time for this fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|3.                     | To calculate the earnings per share for
      the nine month periods ended February 28, 2002and March 31, 2001, the net income was divided by
      the outstanding shares of 990,213.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|4.                     | The results of operations for the nine
      month period ended February 28, 2002, are not necessarily indicative of
      the results to be expected for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|5.                     | Significant Equity Investee: The Company
      owns a 24% equity investment in Taylor Devices, Inc. For the nine months
      ended February 28, 2002, Taylor Devices, Inc. had sales of $11,771,094,
      gross profit of $5,012,666 and net income of
$840,570.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

|****TAYCO DEVELOPMENTS,
  INC.****                                                                                      
|------------------------------------------------------------------------------------------------------------------------
|****                                                                                                                    
|******Management's Discussion and Analysis of the
      Financial Condition********and
      Results of Operations******
|                                                                                                                        

********The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. Certain matters discussed in this section and
elsewhere in this report, which are not historical facts, are forward-looking
statements. Words such as "expects," "intends," "believes," "anticipates,"
"estimates," "assumes," and analogous expressions are intended to identify
forward-looking statements. As such, these statements involve risks and
uncertainties including, but not limited to, economic conditions, product demand
and industry capacity, competition, pricing pressures, the need for the Company
to keep pace with customer needs and technological developments, and other
factors, many or all of which may be beyond the control of the Company. The
following is management's discussion and analysis of certain significant factors
which have affected the Company's earnings during the periods included in the
accompanying consolidated condensed statements of income.

A summary of the period to period changes in the
principal items included in the condensed statements of income is shown
below:

|                                                 | Comparisons of the nine months endedFebruary 28, 2002 and
      March 31, 2001
|------------------------------------------------ | ------------------------------------------------------------------------------
|                                                 | Increase
      (Decrease)                                                     
|                                                 |                                                                               
|Royalties                                        |                                                                               
|Research &
      development revenues            |                                                                               
|Research &
      development expense             |                                                                               
|Selling,
      general and administrative        |                                                                               
|Depreciation
      and amortization              |                                                                               
|Income before
      taxes & equity in affiliates |                                                                               
|Provision for
      income taxes                 |                                                                               
|Equity in net
      income of affiliates         |                                                                               
|Net
      income                                 |                                                                               



---

|TAYCO DEVELOPMENTS,
    INC.                 
|---------------------------------------------
|                                             
|**Management's Discussion
      (Continued)**

Favorable third quarter results
helped contribute to record high financial results for the nine months
year-to-date at 2/28/02. These results were produced with record contributions
from both the operating and affiliate equity streams.

Royalty Income of $167,244 in FY02 represented a
7.2% improvement over $155,967 for FY01, while R&D billings of $304,030 were
11.3% higher than last year's $273,154. Combined, the Total Revenue for the
Company was $471,274, representing a nine month y-t-d record high and a 9.8%
improvement over the previous high figure - FY01's total of $429,121. Both the
Royalty and R&D income were derived from the strong operations and
performance of the Company's primary affiliate, Taylor Devices. Operating
expenses increased to $278,393 from $253,328 for the previous year. This
increase was largely attributable to two factors: travel and hardware expenses
related to prototype testing and an increase in insurance expense. Record
revenues combined with a modest increase in Operating Expenses produced Income
before provision for income taxes and equity in net income of affiliates
(Operating Income) of $192,881 for FY02 (also a new record for a nine month
y-t-d period), which is 9.7% higher than the figure of $175,793 for
FY01.

**FOR THE THREE MONTHS ENDED FEBRUARY 28,
2002** (all figures being compared are for three months ended 02/28/02
vs. the three months ended 03/31/01)

Operating Income for the third quarter of FY02
was $51,488 compared to $125,537 for FY01, due primarily to the reduced revenues
as discussed above. Affiliate income for FY02 was recorded at $68,943 versus
FY01's $93,580 resulting in Net Income of $103,331 and $.10 earnings per share
versus results of $171,117 and $.17 earnings per share for FY01.

Based on the current year-to-date results and
the anticipated strong results from its affiliates, Management believes that the
results of Fiscal Year 2002 should be similar to the favorable results posted in
Fiscal Year 2001.



---

|TAYCO DEVELOPMENTS, INC.             
|-------------------------------------
|                                     
|**Part II - Other
      Information**
|                                     

|PART II- | OTHER INFORMATION |                                                               
|-------- | ----------------- | --------------------------------------------------------------
|         |                  
|         | ITEM 1            | Legal Proceedings:                                            
|         |                   | The Company is not currently engaged in any
      litigation  
|         |                  
|         |                   |                                                               
|         | ITEM 2            | Changes in Securities:
      None                             
|         |                  
|         | ITEM 3            | Defaults Upon Senior
      Securities:None                    
|         |                   |                                                               
|         | ITEM 4            | Submission of Matters to Vote
      of Securities Holders:None
|         |                   |                                                               
|         |                  
|         | ITEM 5            | Other Information:
      None                                 
|         |                   |                                                               
|         | ITEM 6            | Exhibits and Reports on Form
      8-K: None                  



---

|TAYCO DEVELOPMENTS,
    INC.        
|------------------------------------
|                                    
|**Accountants' Review
      Report**
|                                    



The Board of Directors and StockholdersTayco Developments, Inc.

We have reviewed the condensed balance sheet of
Tayco Developments, Inc. as of February 28, 2002, and the related condensed
statements of income and cash flows for the three and nine months ended February
28, 2002 and March 31, 2001. These financial statements are the responsibility
of the Company's management.

We conducted our review in accordance with
standards established by the American Institute of Certified Public Accountants.
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 auditing standards generally
accepted in the United States of America, 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 review, we are not aware of any
material modifications that should be made to the condensed 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
auditing standards generally accepted in the United States of America, the
balance sheet as of May 31, 2001, and the related statements of income, changes
in stockholders' equity, and cash flows for the eleven months then ended (not
presented herein); and in our report dated August 2, 2001, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed balance sheet as of May 31,
2001 is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.

Lumsden & McCormick, LLP Buffalo, New York April 2, 2002



---

|TAYCO DEVELOPMENTS,
    INC.
|----------------------------
|                            
|**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.

|TAYCO DEVELOPMENTS, INC.
|------------------------
|(Registrant)            

|By | /s/Douglas P. Taylor                                                                               |  | Date | April 15, 2002
|-- | -------------------------------------------------------------------------------------------------- |  | ---- | --------------
|   | Douglas P. Taylor
      President Chairman of the Board of Directors (Principal Executive Officer) |  |      |               





|By | /s/Kenneth G. Bernstein                                                                       |  | Date | April 15, 2002
|-- | --------------------------------------------------------------------------------------------- |  | ---- | --------------
|   | Kenneth G.
      Bernstein Treasurer
      (Principal Financial and Accounting
      Officer) |  |      |