FORM 10-QSB





For quarter ended November 30,
2001

Commission File Number 2-15966



|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
        November 30, 2001
|-------------------------------- |  | ----------------------------------------
|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 of November 30, 2001 and May 31, 2001                                                                                                           | 3   
|                                   |                               |                                                                                                                                                                          
|                                   |                               | Statements
        of Income for six months ended November 30, 2001 and
        December 31, 2000, and three months ended November 30,
        2001 and December 31, 2000 | 4   
|                                   |                               |                                                                                                                                                                          
|                                   |                               | Statements
        of Cash Flows for six months ended November 30, 2001 and
        December 31, 2000                                                                     | 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:**                       
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                
|                                                

*S**ee notes to condensed financial
statements.*





---

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



*See notes to
condensed financial statements.*



---

|TAYCO
        DEVELOPMENTS, INC.                                                
|--------------------------------------------------------------------------------
|                                                                                
|**Condensed Statements of Cash
        Flows**                                  
|                                                                                
|                                                                                
|For
        the six months ended November 30, 2001 and December 31,
        2000
|                                                                                
|**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 November 30, 2001 and December
        31, 2000 and the results of operations and cash flows for
        the three and six months then ended. 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 six month
        periods ended November 30, 2001 and December 31, 2000,
        the net income was divided by the outstanding shares of
        990,213.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4. | The results
        of operations for the six month period ended November 30,
        2001, are not necessarily indicative of the results to be
        expected for the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5. | Significant
        Equity Investee: The Company owns a 25% equity investment
        in Taylor Devices, Inc. For the six months ended November
        30, 2001, Taylor Devices, Inc. had sales of $7,630,938,
        gross profit of $3,307,771 and net income of $562,615.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



---

|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 six months
        endedNovember
        30, 2001 and December 31, 2000
|---------------------------------------------------- | ------------------------------------------------------------------------------------------
|                                                     | Increase
        (Decrease)                                                               
|                                                     |                                                                                           
|Royalties                                            |                                                                                           
|Research
        & development                       |                                                                                           
|Research
        & development expense               |                                                                                           
|Selling,
        general and administrative expenses |                                                                                           
|Amortization
        / depreciation                  |                                                                                           
|Operating
        income                             |                                                                                           
|Interest
        expense, net                        |                                                                                           
|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)**

---

With record level contributions
from operations and from affiliates' income, the Company
established record-high figures for the six months and quarter
ending November 30, 2001.



**For the six months ended
November 30, 2001** (all figures being compared are for
six months y-t-d FY2002 vs. six months y-t-d FY2001)

Continuing strong operations of
the Company's primary affiliate, Taylor Devices, helped generate
near-record Royalties of $114,517 and new record Research and
Development revenues of $211,270 for a combined new record level
Total Revenue figure of $325,787. This figure is an improvement
of approximately 47.1% over Total Revenues for FY01 of $221,448.
Operating expenses increased to $184,360 from the previous year's
figure of $170,612 due primarily to the labor costs incurred by
the staff in the final developmental stages of two large
aerospace/defense projects and some increased insurance expenses.
Operating Income of $141,427 for FY02 (also a new record for the
six month y-t-d period) was 178.2% higher than the figure of
$50,836 for FY01.

Net Income from Operations for
FY02 totaled $89,893, compared to the previous year's total of
$35,856 - an improvement of 150.7%. Income from the Company's two
affiliates, Taylor Devices and Tayco Realty came to $141,760 as
Taylor Devices has been enjoying record six month performance
figures also. Affiliate Income for FY02 was a new record figure
and 55.6% higher than the total for FY01. Net Income for the
period was $231,653 with earnings per share of $0.23 versus last
year's results of $126,959 and $0.13 E.P.S. The results for FY02
represent an 82.5% improvement over FY01.



**For the three months
ended November 30, 2001** (all figures being compared are
for the three months ended 11/30/01 vs. the three months ended
12/31/00)

For the second quarter of Fiscal
Year 2002, the Company posted record level figures in Total
Revenues, Operating Income and Net Income. With both Royalty and
R & D income posting new record levels, the Total Revenue
figure of $169,794 itself was a new record figure, versus the
previous year's total of $103,806. Operating Expenses rose
modestly from $88,067 for FY01 to this year's $95,020. Operating
Income rose by 375.1% to $74,774 compared to $15,739 for FY01.

Affiliate income for FY02 was
recorded at $39,865 versus $46,961 for FY01, resulting in Net
Income of $86,764 and $0.09 Earnings per Share versus the results
for FY01 of $58,552 and $0.06 E.P.S. The results for FY02 were a
new record for a second quarter and were a 48.2% improvement over
the figures for FY01.

At the beginning of the third
quarter of FY02, the Company is nearing the end of its
participation in two large aerospace/defense projects that have
absorbed most of the technical staff's time for the past eighteen
months. Currently the staff is involved in the final
testing/acceptance phase for the hardware for both items. The
Company's affiliate, Taylor Devices, has submitted proposals
related to another large-scale aerospace/defense project and is
currently awaiting a decision on these proposals.

Based on the current year-to-date
results and the expected continued high utilization rate of the
Company's staff by Devices - either on another aerospace/defense
project or a backlog of seismic protection and defense related
product upgrades - and projections for another strong year for
Devices, Management believes that the results for Fiscal Year
2002 should be similar to the record results posted in Fiscal
Year 2001.

At this time Management does not
anticipate that the Company will require any additional funding
from outside sources to finance its operations or any expansions.



---

|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:                                                                                                                                                                                                                                                                                                                                         
|         |                           | The
        Annual Meeting of Shareholders was held on November 2,
        2001. The total number of shares outstanding on the
        meeting record date of September 21, 2001 was 990,213. A
        total of 862,188 shares were present in person or by
        proxy at the meeting. The following are the election
        results for the slate of directors presented by
        management:
|         |                           |                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                           |                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                           | Douglas P.
        Taylor Joseph P.
        Gastel
        David A. Lee
        Paul L. Tuttobene
        Janice M. Nicely                                                                                                                                                                                                                                                                           
|         |                           |                                                                                                                                                                                                                                                                                                                                                                                                      
|         |                           |                                                                                                                                                                                                                                                                                                                                                                                                      
|         | 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 November 30,
2001, and the related condensed statements of income and cash
flows for the three and six months ended November 30, 2001 and
December 31, 2000. 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, LLPBuffalo, New YorkJanuary 7, 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 | January 14, 2002
|-- | ----------------------------------------------------------------------------------------------------------------- |  | ---- | ----------------
|   | Douglas P.
        TaylorPresidentChairman of the Board of
        Directors(Principal Executive
        Officer) |  |     



AND



|By | /s/Kenneth
        G. Bernstein                                                           |  | Date | January 14, 2002
|-- | ----------------------------------------------------------------------------------------- |  | ---- | ----------------
|   | Kenneth G.
        BernsteinTreasurer(Principal Financial and
        Accounting Officer) |  |      |