UNITED STATES SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

(Mark One)

FORM 10-K

~~[X]~~þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~(FEE REQUIRED)~~

For the fiscal year ended April 52, ~~2003~~2005

ORor

[o ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(dD) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~(NO FEE REQUIRED)~~

For the transition period from __________________ to __________________

Commission file number 0-9318

SHOPSMITH, INC.

(Exact name of registrant as specified in its charter)

Ohio (State or other jurisdiction of incorporation or organization) 31-0811466 (I.R.S. Employer Identification No.)


Ohio		31-0811466

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6530 Poe Avenue, Dayton, Ohio (Address of principal executive offices) 45414 (Zip Code)


6530 Poe Avenue, Dayton, Ohio		45414

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (937) 898-6070

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class None		Name of Each Exchange on which registered None

Securities registered pursuant to Section 12(g) of the Act:

Common Shares

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (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 þ No o

~~Yes~~ Indicate ~~[X]~~by Nocheck ~~[ ]~~mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark ifwhether ~~disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to~~ the ~~best of~~ registrant’s ~~knowledge,~~is inan ~~definitive~~accelerated ~~proxy~~filer or(as ~~information statements~~defined ~~incorporated by reference~~ in ~~Part~~Exchange ~~III of this Form~~Act Rule 1012b-K2 orof ~~any amendment~~the toact). ~~this~~Yes ~~Form 10-K.~~o ~~[X]~~No þ

~~Indicate~~The byaggregate ~~check~~market ~~mark~~value ~~whether~~of the ~~registrant~~voting isstock anheld ~~accelerated~~by ~~filer~~non-affiliates ~~(as defined~~of inthe ~~Exchange~~registrant ~~Act~~as ~~Rule~~of October ~~12b-~~2), 2004 was $599,204.

~~Yes~~Indicate ~~[ ]~~the Nonumber ~~[X]~~of shares outstanding of each of the registrant’s classes of common stock as of June 28, 2005. Common Shares, without par value: 2,605,233 shares.

The aggregate market value of the voting stock held by non-affiliates of the registrant as of September 28, 2002 was $911,832.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of May 15, 2003. Common Shares, without par value: 2,605,233 shares.

Page 1

TABLE OF CONTENTS

PART I
	ITEM 1. Business
	ITEM 2. Properties
	ITEM 3. Legal Proceedings
	ITEM 4. Submission of Matters to a Vote of Security Holders
PART II
	ITEM 5. Market for Registrant’s Common Equity and Related Stockholder Matters.
	ITEM 6. Selected Financial Data
	ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	ITEM 7A. Quantitative and Qualitative Disclosure about Market Risk
	ITEM 8. Financial Statements and Supplementary Data
	ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
	ITEM 10. Directors and Executive Officers of the Registrant
	ITEM 11. Executive Compensation
	ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	ITEM 13. Certain Relationships and Related Transactions
	ITEM 14. Controls and Procedures.
	ITEM 15. Principal Accountant Fees and Services
PART IV
	ITEM 16. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
SIGNATURES
INDEX TO EXHIBITS
EX-4.11 Amendment to Promissory Note
EX-13 Annual Report to Shareholders
EX-21.1 Subsidiaries
EX-23.1 Consent of Independent Auditors
EX-99.2 Certification
EX-99.3 Certification

DOCUMENTS INCORPORATED BY REFERENCE

Shopsmith, Inc. Annual Report to Shareholders for the year ended April 52, ~~2003~~ –2005 — Only such portions of the Annual Report as are specifically incorporated by reference under Part I and II of this Report shall be deemed filed as part of this Report.

Shopsmith, Inc. Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003 – Definitive copies of the Proxy Statement will be filed with the Commission within 120 days after the end of the Company’s fiscal year. Only such portions of the Proxy Statement as are specifically incorporated by reference under Parts II and III of this Report shall be deemed filed as part of this Report.

Page 2

TABLE OF CONTENTS


PART I
	ITEM 1. Business
	ITEM 2. Properties
	ITEM 3. Legal Proceedings
	ITEM 4. Submission of Matters to a Vote of Security Holders
PART II
	ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Securities
	ITEM 6. Selected Financial Data
	ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
	ITEM 8. Financial Statements and Supplementary Data
	ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	ITEM 9A. Controls and Procedures
	ITEM 9B. Other Information
PART III
	ITEM 10. Directors and Executive Officers of the Registrant
	ITEM 11. Executive Compensation
	ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	ITEM 13. Certain Relationships and Related Transactions
	ITEM 14. Principal Accountant Fees and Services
PART IV
	ITEM 15. Exhibits and Financial Statement Schedules
SIGNATURES
INDEX TO EXHIBITS
EX-4.21
EX-4.22
EX-10.16
EX-10.17
EX-13.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I

ITEM 1. Business

Shopsmith, Inc., an Ohio corporation organized in 1972 (the “Company”), is engaged in the production and marketing of power woodworking tools designed primarily for the home workshop. The principal line of power tools marketed under the name “Shopsmith,” a registered trademark, dates back to 1946 and was purchased by the Company in 1972.

The line is built around the Shopsmith MARK V, a multi-purpose tool, and includes separate function special purpose tools that may be mounted on the MARK V or used independently. The Company distributes these tools directly to consumers through demonstration programs (at which sales representatives solicit orders), telephone sales solicitation, Internet and mail order. ~~During~~ During the fiscal year ended April 52, ~~2003~~2005, Shopsmith branded products accounted for ~~substantially~~ substantially all of the Company’s net sales ~~of the Company~~. The Company manufactures a substantial majority of ~~products~~its products sold (as measured by sales dollar volume).

Shopsmith MARK V, Special Purpose Tools and Major Accessories

The Shopsmith MARK V is a compact power woodworking tool which performs the functions of five separate tools: a table saw, a wood lathe, a disc sander, a horizontal boring machine, and a vertical drill press. The engineering of the MARK V is such that special purpose tools may be mounted on and powered by the MARK V. The special purpose tools, a jointer, a beltsander, a bandsaw, a planer, a scroll saw, and a strip sander, may also be operated as free standing ~~tools~~ tools with a stand and power system.

Other products include MARK V accessories such as a lathe duplicator, which allows a woodworker to duplicate original turnings and a dust collector that, when used with the appropriate fixtures for the MARK V and other Shopsmith products, provides for virtually dust- free woodworking.

The Company also offers a line of accessories to its power tool line. These accessories, only a few of which are manufactured by the Company, include casters, custom saw blades, and molding attachments. Shopsmith accessories are sold directly to the consumer through the same marketing channels used for the Shopsmith power tool line.

Seasonality and Working Capital

The Company’s business is seasonal, with the rate of incoming orders being lowest during the summer months. Consequently, cash requirements are higher during this period of the fiscal year ~~and~~at which time the Company generally experiences a tightening of its liquidity position.

Raw Materials and Components

The principal components and materials used by the Company in the production of its products include aluminum die-castings, iron sand castings, metal stampings, screw machine products, plastics and electric motors. The Company relies on sole sources of supply for some of its components and materials. To reduce costs, the Company uses foreign producers as sources for ~~some~~ some parts and products.

Competition

The power woodworking equipment business is highly competitive and the MARK V and the Company’s other products must compete against the single purpose tools sold by Delta, Power Matic, Black and Decker, Sears and other domestic and foreign corporations.

The Company considers quality, customer service, method of marketing, price and value to be the principal bases of competition in the power woodworking equipment industry.

~~Page~~Research 3and Development

~~Table~~ From oftime ~~Contents~~to time, the Company engages in limited research and development programs to develop new products, and to improve existing products and current operating methods. Research and development costs were not material in 2005, 2004, and 2003.

~~Research and Development~~Employees

~~From~~Page ~~time to time, the Company engages in limited research and development~~3 ~~programs to develop new products, and to improve existing products and current operating methods. Research and development costs were not material in 2003, 2002, and 2001.~~

Employees Table of Contents

The total number of persons employed by the Company (both full and part time) as of ~~May~~June 153, 2005 ~~2003~~ was ~~117~~93. The Company considers its employee relations to be satisfactory, and to date the Company has not experienced a work stoppage due to a labor dispute. The Company has no collective bargaining contracts.

Environmental Compliance

The Company believes that it materially complies with all statutory and ~~administrative~~ administrative requirements related to the environment and pollution control. For a discussion of certain environmental related contingencies to which the Company is subject, reference is made to Note 11 10 to the Consolidated Financial Statements which are incorporated into this Report pursuant to Item 8 below.

~~Page~~Internet 4Website Address and SEC Filings

~~Table~~ The ofCompany ~~Contents~~maintains an internet website, www.shopsmith.com. The Company files reports with the Securities and Exchange Commission, including an Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Those reports and other information concerning the Company are available at the SEC website, www.sec.gov. The Company’s SEC filings are also available via an electronic link from the Company’s website to the SEC’s EDGAR database.

~~ITEM~~Page ~~2. Properties~~4

InformationTable concerning the facilities of the Company is set forth below. Contents

		Approximate
Location	Use	Square feet
Dayton, Ohio	Manufacturing, Headquarters, Distribution and Retail Store		115,000

ITEM 2. Properties

~~The~~Information ~~buildings~~concerning ~~and~~ the ~~Company’s~~facilities ~~machinery~~of ~~and~~the ~~equipment are well maintained. The~~ Company’s ~~production~~is ~~facility~~set ~~currently~~forth ~~operates one shift per day~~below. ~~The Company purchased its manufacturing and headquarters building from its~~ ~~former landlord in December 1998.~~

ITEM 3. Legal Proceedings


Location	Use	Approximate Square Feet
Dayton, Ohio	Manufacturing, Headquarters, Distribution and Retail Store		115,000

The ~~Company~~buildings isand ~~not a party to any legal proceedings other than litigation which, under~~ the ~~instructions~~Company’s tomachinery ~~this~~and ~~item,~~equipment ~~need~~are ~~not~~well ~~be described~~maintained. ~~For~~The aCompany’s ~~discussion~~production offacility ~~certain~~currently ~~environmental~~operates ~~related~~one ~~contingencies~~shift toper ~~which~~day. ~~the~~The Company is ~~subject,~~purchased ~~reference~~its ~~is made to Note 11 to the Consolidated Financial~~manufacturing ~~Statements~~and ~~which~~headquarters ~~are~~building ~~incorporated~~from ~~into~~its ~~this~~former ~~Report~~landlord ~~pursuant~~in ~~to Item~~December ~~8 below~~1998.

ITEM 43. ~~Submission~~Legal ~~of Matters to a Vote of Security Holders~~ Proceedings

~~None~~The Company is not a party to any legal proceedings other than litigation which, under the instructions to this item, need not be described. For a discussion of certain environmental related contingencies to which the Company is subject, reference is made to Note 10 to the Consolidated Financial Statements which are incorporated into this Report pursuant to Item 8 below.

~~Page~~ITEM 54. Submission of Matters to a Vote of Security Holders

~~Table of Contents~~None.

~~EXECUTIVE~~Page ~~OFFICERS OF THE COMPANY~~5

OfficersTable are elected annually by the Board of Directors. The executive officers of the Company are as follows: Contents

Name	Age		Position
John R. Folkerth		70	Chairman of the Board, President and Chief Executive Officer
Robert L. Folkerth		46	President, Chief Operating Officer and Director
Lawrence R. Jones		64	Vice President, Operations
Mark A. May		44	Vice President of Finance, Treasurer and Chief Financial Officer

PART II

~~Robert~~ The L.market ~~Folkerth was named President~~ and ~~Chief~~shareholder ~~Operating~~information ~~Officer~~required inby ~~July 2001.~~Item 5 Heis ~~was~~set ~~Vice~~forth ~~President~~under ofthe ~~Sales and Marketing from 1996 to July 2001.~~heading ~~Before~~“Shareholders’ ~~accepting~~Information” ~~that~~on ~~position~~page ~~with~~28 in the Company,’s ~~Mr. Folkerth~~Annual ~~was~~Report ~~Vice President~~to ofShareholders ~~Finance~~for ofthe ~~Digitron~~year ended April 2, a2005 ~~manufacturer~~(which ofreport ~~automotive~~is ~~components,~~included ~~from 1991~~as ~~until 1996~~Exhibit 13.1 Heto ~~has~~this ~~been~~Report). aSuch ~~director~~information ofis incorporated ~~the~~herein ~~Company~~by ~~since 1994~~reference.

~~Lawrence~~ The R.Company ~~Jones~~paid ~~was~~no ~~named~~dividends ~~Vice~~during ~~President~~the offiscal ~~Operations~~years inended ~~August~~April 2, ~~1999. He~~2005 ~~served~~or ~~as president of Superay Tool Co.~~April 3, ~~a manufacturer of Air tools from~~2004. ~~1996~~The ~~through~~Loan ~~1998.~~Agreement ~~After~~between ~~1998~~the Company and ~~before~~Provident ~~employment~~Bank ~~with~~prohibits the ~~Company,~~payment ~~Mr. Jones served as President~~ of ~~ZLL Marketing, a consulting/sourcing firm~~dividends.

~~Mark~~ As A.more ~~May~~fully ~~was~~indicated ~~named~~in ~~Vice~~Note ~~President~~6 ofto ~~Finance~~the ~~and~~Consolidated ~~Chief~~ Financial ~~Officer~~ Statements included in ~~February~~the Company’s ~~2000.~~Annual ~~Mr.~~Report to Shareholders for the year ended April ~~May~~2, ~~has~~2005, ~~served~~during the fiscal years ended April 5, 2003, April 3, 2004, and April 2, 2005 the Company issued to certain key employees and non-employee directors stock options to purchase Common Shares of the Company under the Company’s ~~finance~~1995 ~~department~~Stock Option Plan, 1997 Stock Option Plan and 2000 Director Stock Option Plan. Shares issuable under the 1997 Stock Option Plan and the 2000 Director Stock Option Plan have not been registered under the Securities Act of 1933, and none of the options under either of such plans have as yet been exercised. The grant of options pursuant to the 1997 Stock Option Plan and the 2000 Director Stock Option Plan was exempt from the registration provisions of the Securities Act of 1933 (i) as a transaction not involving a sale of securities, since ~~1980~~no investment decision was required on the part of the option recipients, and/or (ii) under Section 4(2) of such Act as a transaction not involving a public offering. It is anticipated that the Common Shares subject to the options will be registered under the Securities Act of 1933 prior to exercise of the options.

~~Page~~ITEM 6. Selected Financial Data

~~Table~~ The ofinformation ~~Contents~~required by Item 6 is set forth under the heading “Selected Financial Data” on page 27 in the Company’s Annual Report to Shareholders for the year ended April 2, 2005 and is incorporated herein by reference.

~~PART~~ITEM II 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~ITEM~~ The 5.information ~~Market~~required ~~for~~by ~~Registrant~~Item 7 is set forth under the heading “Management’s ~~Common~~Discussion ~~Equity~~and Analysis of Financial Condition and ~~Related~~Results ~~Stockholder~~of Operations” on page 22 of the Company’s Annual ~~Matters~~Report to Shareholders for the year ended April 2, 2005 and is incorporated herein by reference.

~~The~~ITEM ~~market and shareholder information required by Item 5 is set forth under the heading “Shareholders’ Information” p~~7A.25 inQuantitative ~~the~~and ~~Company’s~~Qualitative ~~Annual Report~~Disclosures toabout ~~Shareholders~~Market ~~for the year ended April 5, 2003 (which report is included as Exhibit 13.1 to this Report). Such information is incorporated herein by reference.~~ Risk

~~The~~ Not ~~Company paid no dividends in the fiscal years ended April 5, 2003 and March 30, 2002~~applicable.

AsITEM more fully indicated in Note 6 to the consolidated financial statements included in the Company’s Annual Report to Shareholders for the year ended April 5, 2003, during the fiscal years ended March 31, 2001, March 30, 2002, and April 5, 2003 the Company issued to certain key employees and non-employee directors stock options to purchase Common Shares of the Company under the Company’s 1995 Stock Option Plan, 1997 Stock Option Plan and 2000 Director Stock Option Plan8. ~~Shares~~Financial ~~issuable~~Statements ~~under the 1997 Stock Option Plan~~ and ~~the~~Supplementary 2000 Director Stock Option Plan have not been registered under the Securities Act of 1933, and none of the options under either of such plans has as yet been exercised. The grant of options pursuant to the 1997 Stock Option Plan and the 2000 Director Stock Option Plan was exempt from the registration provisions of the Securities Act of 1933 (i) as a transaction not involving a sale of securities, since no investment decision was required on the part of the option recipients, and/or (ii) under Section 4(2) of such Act as a transaction not involving a public offering. It is anticipated that the Common Shares subject to the options will be registered under the Securities Act of 1933 prior to exercise of the options. Data

~~ITEM~~ The 6.information ~~Selected~~required ~~Financial~~by ~~Data~~Item 8 is set forth at pages 5 through 21 of the Company’s Annual Report to Shareholders for the year ended April 2, 2005 and is incorporated herein by reference.

~~The~~ITEM ~~information required by Item 6 is set forth under the heading “Selected Financial Data” (p~~9.~~24)~~ Changes in ~~the~~and ~~Company’s~~Disagreements ~~Annual~~with ~~Report~~Accountants toon ~~Shareholders for~~Accounting ~~the year ended April 5, 2003~~ and isFinancial ~~incorporated herein by reference.~~ Disclosure

~~ITEM~~ Not 7applicable. ~~Management’s Discussion and Analysis of Financial Condition and~~ ~~Results of Operations~~

~~The~~Page ~~information required by Item 7 is set forth under the heading~~6 ~~“Management’s Discussion and Analysis” (p.21) of the Company’s Annual Report to Shareholders for the year ended April 5, 2003 and is incorporated herein by reference.~~

ITEMTable 7A.of Quantitative and Qualitative Disclosure about Market Risk Contents

~~Not~~ITEM ~~Applicable~~9A. Controls and Procedures.

~~ITEM~~ (a) Evaluation 8.of ~~Financial~~Disclosure ~~Statements~~Controls and ~~Supplementary Data~~Procedures

The ~~information~~Company’s ~~required~~Chairman byand ~~Item 8~~Chief isExecutive ~~set~~Officer, ~~forth~~John atR. ~~pages~~Folkerth, ~~3 through 10~~ and ~~under~~ the ~~heading~~Company’s ~~“Selected~~ Chief Financial ~~Data”~~Officer, pMark A.24 ofMay, have evaluated the Company’s ~~Annual~~disclosure ~~Report~~controls and procedures as toof ~~Shareholders~~the ~~for~~end of the ~~year~~period ~~ended~~covered ~~April 5~~by this Report. Based on that evaluation, ~~2003~~Messrs. Folkerth and isMay have ~~incorporated~~concluded ~~herein~~that ~~by reference~~the Company’s disclosure controls and procedures are effective.

~~ITEM 9.~~ (b) Changes in ~~and~~Internal ~~Disagreements~~Controls ~~with~~Over ~~Accountants on Accounting and~~ Financial ~~Disclosure~~Reporting

~~Not~~ There ~~applicable.~~were no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of the Company’s fiscal year that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Page~~ITEM 79B. Other Information.

~~Table~~ On April 26, 2005, the Company entered into a factoring arrangement with Citizens Finance Company, whereby the Company sold substantially all of ~~Contents~~its consumer revolving credit receivables for $1,139,000. The Company plans to finance ongoing customer purchases through Citizens Finance Company.

~~PART~~ On ~~III~~June 3, 2005, the Company’s Revolving Credit Agreement with Provident Bank was amended to limit borrowings to the lesser of (i) $600,000 or (ii) the sum of 80% of accounts receivable due from Lowe’s Companies. Interest on the Revolving Credit Agreement is charged at one and one-half percent over the bank’s prime rate. The maturity date on the agreement is August 15, 2005.

~~ITEM~~Page ~~10. Directors and Executive Officers of the Registrant~~7

TheTable information required by Item 10 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003 except for certain information concerning the executive officers of the Company which is set forth in Part I of this Report. Contents

~~ITEM~~PART ~~11. Executive Compensation~~III

~~The~~ITEM ~~information~~10. ~~required~~Directors byand ~~Item 11~~Executive isOfficers ~~incorporated~~of ~~herein by reference from~~ the ~~Company’s Proxy Statement for its Annual Meeting of Shareholders to be held July 30, 2003.~~ Registrant

~~ITEM~~Directors ~~12. Security Ownership of Certain Beneficial Owners~~ and ~~Management~~Executive ~~and~~Officers ~~Related Stockholder Matters~~

~~Equity~~The ~~Compensation~~directors ~~Plan~~and ~~Information~~executive officers of the Company are as follows:

The following table shows certain information as of April 5, 2003 with respect to compensation plans under which common shares of the Company are authorized for issuance:


Name	Age		Position
John R. Folkerth		72	Chairman of the Board and Chief Executive Officer
Robert L. Folkerth		48	President, Chief Operating Officer, and Director
J. Michael Herr		61	Director
Edward A. Nicholson		65	Director
Brady L. Skinner		54	Director
Lawrence R. Jones		66	Vice President of Operations
Mark A. May		46	Vice President of Finance, Treasurer, and Chief Financial Officer

Number of shares

remaining available for

future issuance under

Number of shares to be

Weighted average

equity compensation

issued upon exercise of

exercise price of

plans (excluding shares

outstanding options

in column (a))

Plan category

(a)

(b)

(c)

Equity compensation plans approved by shareholders

367,000

0.54

103,000

Equity compensation plans not approved by shareholders

44,000

1.67

48,000

JOHN R. FOLKERTH is the founder of the Company and has been a director and Chief Executive Officer of the Company since 1972 and Chairman of the Board since 1986.

~~The~~ ROBERT ~~remaining~~L. ~~information~~FOLKERTH ~~required~~has bybeen ~~Item 12~~a isdirector ~~incorporated~~of ~~herein by reference from~~ the Company’s ~~Proxy~~since ~~Statement~~1994 ~~for~~and its ~~Annual~~President ~~Meeting~~and ofChief ~~Shareholders~~Operating toOfficer besince ~~held~~July 2001. He was Vice President of Sales and Marketing from 1996 to July 2001. Mr. 30Folkerth was a Corporate Vice President, ~~2003~~Finance, and Secretary of Digitron, Inc. from 1991 until 1996. Robert L. Folkerth is the son of John R. Folkerth.

~~ITEM 13~~ J. MICHAEL ~~Certain~~HERR ~~Relationships~~has been a director of the Company since 1975 and ~~Related~~Secretary ~~Transactions~~since 1985. Mr. Herr has been a member of the law firm of Thompson Hine LLP, Dayton, Ohio since 1989. Thompson Hine LLP serves as counsel to the Company.

~~The~~ EDWARD ~~information~~A. ~~required~~NICHOLSON byhas ~~item~~been 13a isdirector ~~incorporated~~of ~~herein~~the byCompany ~~reference from~~since 1984. Dr. Nicholson has been the President ~~Company’s~~of ~~Proxy~~Robert ~~Statement~~Morris ~~for~~University ~~its~~in ~~Annual~~Coraopolis, ~~Meeting~~Pennsylvania since 1989. Dr. Nicholson is also an independent management consultant. He serves as a director of Blackbox ~~Shareholders~~Corporation, toLawrence, bePennsylvania, and Brentwood Bank, ~~held~~Bethel ~~July 30~~Park, ~~2003~~Pennsylvania.

~~ITEM~~ BRADY 14L. ~~Controls~~SKINNER has been a director of the Company since 1995. Since January 1997, Mr. Skinner has been associated with the Dayton, Ohio-based accounting firm of Brady, Ware & Schoenfeld, Inc. Mr. Skinner was self-employed as an accountant from June 1996 through December 1996. From 1994 to June 1996, Mr. Skinner was an Audit Partner with the Dayton, Ohio-based accounting firm of Flagel, Huber, Flagel & Co. He was an Audit Partner in the accounting firm of Coopers and ~~Procedures~~Lybrand L.L.P. from 1983 to 1994. He is also President of Phoenix Beverage Co.

~~(a)~~ LAWRENCE R. JONES was named Vice President of Operations in August ~~Evaluation~~1999. He served as President of ~~Disclosure~~Superay ~~Controls~~Tool Co., a manufacturer of air tools from 1996 through 1998. After 1998 and before ~~Procedures~~employment with the Company, Mr. Jones served as President of ZLL Marketing, a consulting/sourcing firm.

~~The~~ MARK ~~Company’s~~A. ~~Chairman~~MAY ~~and~~was ~~Chief~~named ~~Executive~~Vice ~~Officer,~~President ~~John~~of R.Finance ~~Folkerth,~~ and ~~the~~ ~~Company’s~~ Chief Financial Officer, ~~Mark~~in AFebruary 2000. ~~May, have evaluated the~~ ~~Company’s internal controls and disclosure controls systems within 90 days of the filing of this report~~Mr. ~~Messrs.~~ ~~Folkerth and~~ May ~~have~~has ~~concluded~~served ~~that~~ the Company’s ~~disclosure~~finance ~~controls~~department ~~systems~~since ~~are functioning effectively to provide~~1980. ~~reasonable assur-~~

~~Page~~Audit 8Committee Financial Expert

~~Table~~The Board of ~~Contents~~Directors has determined that Mr. Skinner is an “audit committee financial expert” as defined by the Securities and Exchange Commission.

~~ance~~Section ~~that~~16(a) ~~the~~Beneficial ~~Company~~Ownership ~~can~~Reporting ~~meet its disclosure obligations. The~~Compliance reporting process is designed to ensure that information required to be disclosed by the Company in the reports that it files or submits with the Commission is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Since Messrs. Folkerth’s and May’s most recent review of the Company’s internal controls systems, there have been no significant changes in internal controls or in other factors that could significantly affect these controls.

~~(b) Changes~~Page ~~in Internal Controls~~8

ThereTable wereof no significant changes in the Company’s internal controls or in other factors that could significantly affect the Company’s disclosure controls and procedures subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions. As a result, no corrective actions were taken. Contents

~~ITEM~~Federal 15securities laws require our directors and officers and persons who own more than 10% of the outstanding Common Shares of the Company to file reports of ownership and changes in ownership with the Securities and Exchange Commission and to furnish the Company with copies of all such reports. Based ~~Principal~~solely ~~Accountant~~upon ~~Fees~~our review of the copies of these reports received by us and ~~Services~~written representations that no other reports were required to be filed, we believe that, during the fiscal year ended April 2, 2005, all filing requirements applicable to our directors, officers and greater than 10% shareholders were met.

~~The~~Code ~~information required by item 15 is incorporated herein by reference from the Company’s Proxy Statement for its Annual Meeting~~ of ~~Shareholders to be~~Ethics ~~held July 30, 2003.~~

~~Page~~The 9Board of Directors has adopted a Code of Ethics that applies to the Company’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Chief Accounting Officer. The Code of Ethics is intended to comply with Item 406 of Regulation S-K of the Securities Exchange Act of 1934, as amended. A copy of the Code of Ethics is filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended April 3, 2004.

~~Table~~ITEM of11. ~~Contents~~Executive Compensation

~~PART~~ The IVfollowing table sets forth the certain summary information, for the fiscal years indicated, concerning the compensation of John R. Folkerth, Chairman and Chief Executive Officer, Robert L. Folkerth, President and Chief Operating Officer, and Lawrence R. Jones, Vice President - Operations.

~~ITEM~~SUMMARY ~~16.~~COMPENSATION ~~Exhibits, Financial Statement Schedules, and Reports on Form 8-K~~TABLE

(a) 1. Financial Statements


							Long Term
			Annual Compensation				Compensation
							Securities		All Other
	Fiscal						Underlying		Compensation
Name and Principal Position	Year		Salary ($)		Bonus($)		Options(#)		($)(1)(2)(3)
John R. Folkerth, Chairman		2005	$	150,000	$	0		0	$	5,500
and Chief Executive Officer		2004		150,000		10,539		0		5,500
		2003		136,154		10,653		30,000		5,500

Robert L. Folkerth, President		2005	$	117,624	$	0		0	$	1,684
and Chief Operating Officer		2004		117,624		9,904		0		1,684
		2003		106,766		8,354		30,000		1,684

Lawrence R. Jones,		2005	$	104,041	$	0		0	$	2,421
Vice President - Operations		2004		100,510		9,493		0		2,421
		2003		89,255		6,983		0		2,421

~~The~~(1) ~~following~~Includes ~~consolidated~~$5,500 ~~financial~~for ~~statements~~each of ~~Shopsmith~~2005, ~~Inc.~~2004, and ~~its~~2003 ~~subsidiaries~~representing ~~are~~whole ~~incorporated~~life byinsurance ~~reference~~premiums aspaid ~~part~~by ofthe ~~this~~Company ~~Report~~for atinsurance ~~Item~~benefiting ~~8 hereof~~Mr. John Folkerth

~~Report~~(2) ofIncludes ~~Independent Auditors. Consolidated Balance Sheets as of April 5~~$1,684 ~~2003~~for ~~and~~each ~~March 30, 2002. Consolidated Statements~~ of ~~Operations for the years ended April 5~~2005, ~~2003~~2004, ~~March 30, 2002,~~ and ~~March~~2003 ~~31,~~representing ~~2001.~~whole ~~Consolidated~~life ~~Statements~~insurance ofpremiums ~~Changes~~paid inby ~~Shareholders’ Equity for~~ the ~~years~~Company ~~ended April 5, 2003, March 30, 2002, and March 31, 2001. Consolidated Statements of Cash Flows~~ for ~~the~~insurance ~~years~~benefiting ~~ended April 5, 2003, March 30, 2002, and March 31, 2001~~Mr. ~~Notes~~Robert ~~to Consolidated Financial Statements.~~Folkerth

(3) Includes $2.,421 ~~Financial~~for ~~Statement~~each ~~Schedules~~of 2005, 2004, and 2003 representing whole life insurance premiums paid by the Company for insurance benefiting Mr. Jones.

~~The~~Stock ~~following Financial Statement Schedule for the years ended April 5, 2003, March 30, 2002, and March 31, 2001 are included in this report.~~Options

~~Report~~ The offollowing ~~Independent~~tables ~~Auditors~~set ~~Schedule~~forth ~~II-~~information ~~Valuation~~concerning options granted to, and ~~Qualifying~~unexercised options ~~Accounts~~held by, certain executive officers of the Company. No options were granted to or exercised by any named executive officer during fiscal year 2005.

~~Other~~Page schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto. Individual financial statements of the registrant have been omitted since the registrant is primarily an operating company and all consolidated subsidiaries are wholly owned.9

3.Table Exhibitsof Contents

~~The~~FISCAL ~~Exhibits~~YEAR-END ~~that~~OPTION ~~are filed with this Report are listed in the Exhibit Index. All management contracts or compensatory plans or arrangements are indicated on the Exhibit Index.~~TABLE

(b) Reports on Form 8-K


	Number of Securities Underlying				Value of Unexercised In-the-
	Unexercised Options at April 2, 2005				Money Options at April 2, 2005
Name	Exercisable		Unexercisable		Exercisable		Unexercisable
John R. Folkerth		30,000		—	$	600	$	—
Robert L. Folkerth		90,000		—		600		—
Lawrence R. Jones		85,000		—		1,800		—

~~During~~Compensation ~~the~~of ~~quarter ended April 5, 2003, the Company did not file any reports on Form 8-K.~~Directors

~~Page~~Non-employee 10directors receive a fee of $700 per month for services as a director. In addition, under our Director Stock Option Plan, non-employee directors receive annually an option to purchase 2,000 Common Shares of the Company at an exercise price equal to market value on the date of grant of the option.

~~Table~~ITEM 12. Security Ownership of ~~Contents~~Certain Beneficial Owners and Management and Related Stockholder Matters

~~SIGNATURES~~Equity Compensation Plan Information

~~Pursuant~~ The tofollowing ~~the~~table ~~requirements~~shows ofcertain ~~Section 13~~information oras ~~15(d)~~ of ~~the Securities Exchange Act of 1934~~April 2, ~~the~~2005 ~~registrant~~with ~~has~~respect ~~duly caused this report~~ to ~~be signed~~compensation onplans ~~its~~under ~~behalf~~which bycommon ~~the~~shares ~~undersigned,~~of ~~thereunto~~the ~~duly~~Company are authorized. for issuance:

SHOPSMITH, INC.

Number of shares

remaining available for

future issuance under

Number of shares to be

Weighted average

equity compensation

issued upon exercise of

exercise price of

plans (excluding shares

outstanding options

in column (a))

Plan category

(a)

(b)

(c)

Equity compensation plans approved by shareholders

345,000

0.45

125,000

Equity compensation plans not approved by shareholders

36,000

0.47

36,000

~~By/s/~~Security ~~John~~Ownership R.of ~~Folkerth~~Directors and Officers

~~Pursuant~~ Set toforth in the ~~requirements~~table ofbelow ~~the~~is ~~Securities Exchange~~information ~~Act~~as of ~~1934~~June 15, ~~this~~2005 ~~report~~with ~~has~~respect ~~been~~to the number of ~~signed~~Common ~~below~~Shares byof the ~~following~~Company ~~persons~~beneficially onowned ~~behalf~~by ~~of the~~each ~~registrant~~director and inexecutive officer of the Company ~~capacities~~and by all directors and onexecutive ~~the dates~~officers ~~indicated~~as a group.

/s/ John R. Folkerth John R. Folkerth Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)		/s/ Edward A. Nicholson Edward A. Nicholson Director June 3, 2003 Date
June 3, 2003 Date /s/ Robert L. Folkerth Robert L. Folkerth Vice President, Sales and Marketing, Director June 3, 2003 Date		/s/ Brady L. Skinner Brady L. Skinner Director June 3, 2003 Date
/s/ Mark A. May Mark A. May Vice President of Finance (Principal Financial and Accounting Officer)		/s/ J. Michael Herr J. Michael Herr Director June 3, 2003 Date
June 3, 2003 Date

For purposes of this table, an individual is considered to “beneficially own” any Common Shares (i) over which he exercises sole or shared voting or investment power, or (ii) of which he has the right to acquire beneficial ownership at any time within 60 days after June 15, 2005. Unless otherwise indicated, voting power and investment power is exercised solely by the named individual or individuals in the group or is shared by such individual and his spouse or children.

Page 11 10

I, John R. Folkerth, certify that:


	Number of Shares			Total as a
Individual or	Beneficially Owned			Percentage of the
Group	as of June 15, 2005			Class (a)
John R. Folkerth (b)		605,690	(c)(d)		23.0	%

Robert L. Folkerth (b)		253,093	(c)(d)		9.4	%

J. Michael Herr		13,200	(e)			(f)

Lawrence R. Jones (b)		117,446	(d)		4.4	%

Edward A. Nicholson		12,100	(e)			(f)

Mark A. May (b)		82,156	(c)(d)		3.1	%

Brady L. Skinner		17,000	(e)			(f)

Directors and Executive Officers as a Group (7 persons)		1,100,685	(c)(g)		37.7	%

1.(a) IThe ~~have~~percentages ~~reviewed~~are ~~this~~calculated ~~annual~~on ~~report~~the onbasis ~~Form~~of ~~10-K~~the number of ~~Shopsmith~~Common Shares outstanding as of June 15, ~~Inc~~2005 plus the number of Common Shares subject to outstanding options exercisable within 60 days thereafter that are held by the individual or group, as the case may be.; 2(b) The business address of John R. ~~Based~~Folkerth, onRobert myL. ~~knowledge~~Folkerth, ~~this~~Lawrence ~~quarterly~~R. ~~report~~Jones ~~does~~and ~~not~~Mark ~~contain~~A. ~~any~~May ~~untrue~~is ~~statements~~6530 Poe Avenue, Dayton, Ohio 45414. (c) The table includes 26,971, 3,496, 10,156 and 46,444 shares held in the Company’s Savings Plan for the benefit of ~~material~~John ~~fact~~R. orFolkerth, ~~omit~~Robert toL. ~~state~~Folkerth, Mark A. May and all directors and executive officers as a ~~material~~group, ~~fact~~respectively. ~~necessary~~The toSavings ~~make~~Plan’s participants have the ~~statements~~right ~~made~~to vote shares held for their accounts, inbut ~~light~~disposition of the ~~circumstances~~shares ~~under~~is ~~which~~restricted ~~such~~and ~~statements~~may ~~were~~be made, ~~not~~only ~~misleading~~in accordance with the terms of the Plan. Information with respect to shares held in the ~~period~~Savings ~~covered~~Plan byis ~~this~~as ~~quarterly~~of ~~report;~~June 315, 2005. ~~Based~~(d) onIncludes my30,000, ~~knowledge~~90,000, ~~the~~85,000 ~~financial~~and ~~statements~~70,000 ~~and~~shares ~~other~~that ~~financial~~may ~~information~~be ~~included~~acquired inat ~~this~~any ~~quarterly~~time ~~report,~~within ~~fairly~~60 ~~present~~days inafter ~~all~~June ~~material~~15, ~~respects~~2005 ~~the~~by ~~financial~~John ~~condition~~R. Folkerth, ~~results~~Robert ofL. ~~operations~~Folkerth, Lawrence R. Jones and ~~cash~~Mark ~~flows~~A. May, respectively, upon the exercise of options granted under the ~~registrant~~Company’s asStock ofOption Plans. (e) Includes 12,000 ~~and~~shares ~~for~~that ~~the~~may ~~periods~~be ~~presented~~acquired inat any time within 60 days after June 15, 2005, upon the ~~quarterly~~exercise ~~report;~~of 4.options ~~The~~granted ~~registrant~~under the Company’s ~~other~~Director ~~certifying~~Stock ~~officers~~Option ~~and~~Plan Ifor ~~are~~non-employee ~~responsible~~directors. ~~for~~(f) ~~establishing~~Less ~~and~~than ~~maintaining~~1.0%. ~~disclosure~~(g) ~~controls~~Includes ~~and~~311,000 ~~procedures~~shares ~~(as~~that ~~defined~~may inbe ~~Exchange~~acquired ~~Act~~at ~~Rules~~any ~~13a-14~~time ~~and~~within ~~15d-14)~~60 ~~for~~days after June 15, 2005, upon the ~~registrant~~exercise of options granted under the Company’s Director Stock Option Plan, 1995 Stock Option Plan and we1997 ~~have:~~Stock Option Plan by all directors and executive officers as a group.

a)Page designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;11

5.Table The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):Contents

6. In ~~The~~July 2003, ~~registrant’s~~the ~~other~~Company ~~certifying~~established ~~officers~~a ~~and~~credit Ifacility ~~have~~with ~~indicated~~its incurrent ~~this~~bank ~~quarterly~~lender, ~~report~~and ~~whether~~the repaid orborrowings ~~not~~from ~~there~~John ~~were~~Folkerth. ~~significant~~Mr. Folkerth ~~changes~~personally inguaranteed ~~internal~~$200,000 ~~controls~~of orthe borrowings inunder ~~other~~the ~~factors~~credit ~~that~~facility. ~~could~~In ~~significantly~~consideration ~~affect~~of ~~internal~~Mr. Folkerth’s ~~controls~~agreement ~~subsequent~~ to provide the guaranty, ~~date~~the ofCompany ~~our~~pays ~~most~~to ~~recent~~Mr. Folkerth ~~evaluation,~~a ~~including~~guaranty ~~any~~fee ~~corrective~~of ~~actions~~1.5%. ~~with~~Guaranty ~~regard~~fees of $3,000 were paid to ~~significant~~Mr. Folkerth ~~deficiencies~~during ~~and~~the ~~material~~fiscal ~~weaknesses~~year ended April 2, 2005.

~~Date:~~ITEM ~~June~~14. 3,Principal ~~2003~~Accountant Fees and Services

~~By:~~ Crowe /Chizek and Company LLC (“Crowe Chizek”) was the Company’s/ ~~John~~independent R.registered ~~Folkerth~~public accounting ~~John~~firm R.for ~~Folkerth~~the ~~Chairman~~fiscal year ending April 2, 2005 and ~~Chief~~the ~~Executive~~fiscal ~~Officer~~year ended April 3, 2004. For such fiscal years, the Company was billed fees in the following amounts for services by Crowe Chizek:

Page 12


	Fiscal Year Ended		Fiscal Year Ended
	April 2, 2005		April 3, 2004
Audit fees	$	54,900	$	55,775
Audit-related fees		7,250		6,750
Tax fees		0		0
All other fees		0		0

~~Table~~Audit fees related to Crowe Chizek’s audit of ~~Contents~~the Company’s annual financial statements and their reviews of financial statements included in the Company’s quarterly reports on Form 10-Q. Audit-related fees were incurred in connection with an audit of the Company’s 401(k) plan. All audit and non-audit services performed for the Company by its independent registered public accounting firm are subject to pre-approval by the Company’s Audit Committee.

I,Page ~~Mark A. May, certify that:~~12

1.Table I have reviewed this annual report on Form 10-K of Shopsmith, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statements of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for the periods presented in the quarterly report; 4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:Contents

a)PART designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;IV

5ITEM 15. ~~The~~Exhibits ~~registrant’s other certifying officers~~ and IFinancial ~~have~~Statement ~~disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):~~Schedules

(a) 1. ~~all~~Financial significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; andStatements

6. The ~~registrant’s~~following ~~other~~consolidated ~~certifying~~financial ~~officers~~statements ~~and~~of IShopsmith, ~~have~~Inc. ~~indicated~~and inits subsidiaries ~~this~~are ~~quarterly~~incorporated ~~report~~by ~~whether~~reference oras ~~not~~part ~~there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date~~ of ~~our~~this ~~most~~Report ~~recent~~at ~~evaluation,~~Item 8 ~~including any corrective actions with regard to significant deficiencies and material weaknesses~~hereof.

~~Date:~~Report ~~June~~of 3,Independent ~~2003~~Registered Public Accounting Firm.

~~By:~~Consolidated ~~/s/~~Balance ~~Mark~~Sheets A.as ~~May Mark A. May Vice President~~ of ~~Finance~~April 2, 2005 and ~~Treasurer~~April 3, 2004.

~~Page~~Consolidated 13Statements of Operations for the years ended April 2, 2005, April 3, 2004, and April 5, 2003.

~~Table~~Consolidated Statements of ~~Contents~~Changes in Shareholders’ Equity for the years ended April 2, 2005, April 3, 2004, and April 5, 2003.

~~REPORT~~Consolidated OFStatements ~~INDEPENDENT~~of ~~AUDITORS~~Cash ONFlows ~~FINANCIAL~~for ~~STATEMENT~~the ~~SCHEDULE~~years ended April 2, 2005, April 3, 2004, and April 5, 2003.

~~Shareholders~~Notes ~~and~~to ~~Board~~Consolidated ofFinancial ~~Directors Shopsmith, Inc~~Statements. ~~Dayton, Ohio~~

~~Our audits of the consolidated financial statements referred to in our report dated May 14, 2003 appearing in the Annual Report to Shareholders of Shopsmith, Inc~~ 2. ~~for the year ended April~~ 5,Financial ~~2003~~Statement ~~(which report and~~Schedules ~~consolidated financial statements are incorporated by reference in this~~ ~~Annual Report on Form 10-K) also included an audit of the financial~~ statement schedule listed in Item 16(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~Crowe~~The ~~Chizek~~following Financial Statement Schedule for the years ended April 2, 2005, April 3, 2004, and ~~Company~~April 5, ~~LLC~~2003 is included in this report.

~~Columbus,~~Report ~~Ohio~~of Independent Registered Public Accounting Firm on Financial Statement ~~May~~Schedule Schedule ~~14,~~II- ~~2003~~Valuation and Qualifying Accounts

~~Page~~Other 14schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

~~Table~~Individual financial statements of ~~Contents~~the registrant have been omitted since the registrant is primarily an operating company and all consolidated subsidiaries are wholly owned.

~~SHOPSMITH INC~~ 3. ~~AND SUBSIDIARIES SCHEDULE II~~ Exhibits

~~VALUATION~~The ~~AND~~Exhibits ~~QUALIFYING~~that ~~ACCOUNTS FOR~~are ~~THE~~filed ~~YEARS~~with ~~ENDED~~this ~~April 5,~~Report ~~2003,~~are ~~March 30,~~listed ~~2002,~~in ~~and~~the ~~March~~Exhibit ~~31,~~Index. ~~2001~~All management contracts or compensatory plans or arrangements are indicated on the Exhibit Index.

		BALANCE					CHARGED				BALANCE
		AT					TO COST		DEDUCTIONS		AT
		BEGINNING					AND		FROM		END
DESCRIPTION		OF YEAR		Transfers			EXPENSES		RESERVE		OF YEAR
Reserves deducted from assets to which they apply:
YEAR ENDED
April 5, 2003
	Accrued recourse liability		147,786		(16,342	)		219,611		—		351,055
	Allowance for doubtful accounts receivable		891,140		16,342			313,599		99,883		1,121,198
YEAR ENDED
March 31, 2002
	Accrued recourse liability		235,303		(87,517	)		—		—		147,786
	Allowance for doubtful accounts receivable		924,250		87,517			245,426		366,053		891,140
YEAR ENDED
March 30, 2001
	Accrued recourse liability		390,369		(155,066	)		—		—		235,303
	Allowance for doubtful accounts receivable		646,756		155,066			318,683		196,255		924,250

Page 13

TransfersTable areof made from the accrued recourse liability account to the allowance for doubtful accounts receivable as accounts financed by the Company with Household Retail Services on a recourse basis are purchased by the Company. Contents

~~Page 15~~ SIGNATURES

~~Table~~ Pursuant to the requirements of ~~Contents~~Section 13 or 15(d) 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.

SHOPSMITH, INC. /s/ John R. Folkerth John R. Folkerth Chairman of the Board and Chief Executive Officer June 29, 2005 Date

~~INDEX~~ Pursuant TOto ~~EXHIBITS~~the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Exhibit No. and Document


/s/ John R. Folkerth		/s/ Edward A. Nicholson

John R. Folkerth		Edward A. Nicholson
Chairman of the Board		Director
Chief Executive Officer and Director
(Principal Executive Officer)

June 29, 2005		June 29, 2005
Date		Date

/s/ Robert L. Folkerth		/s/ Brady L. Skinner

Robert L. Folkerth		Brady L. Skinner
President and Director		Director

June 29, 2005		June 29, 2005
Date		Date

/s/ Mark A. May		/s/ J. Michael Herr

Mark A. May		J. Michael Herr
Vice President of Finance		Director
(Principal Financial and Accounting Officer)

June 29, 2005		June 29, 2005
Date		Date

3. Articles of Incorporation and By-laws
	3.1.	Amended Articles of Incorporation of Shopsmith, Inc., filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-26463).	*
	3.2.	Amended Code of Regulations of Shopsmith, Inc., filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-26463).	*
4. Instruments Defining the Rights of Security Holders, Including Indentures
	4.10.	Promissory note and mortgage dated December 31, 1998 between Mid-States Development Company and the Company related to the purchase of the 6530 Poe Avenue, Dayton, Ohio property. Filed as exhibit 4.10 to the Company’s quarterly report on Form 10-Q for the quarter ended January 2, 1999.	*
	4.11.	Amendment dated March 11, 2002 to promissory note between Mid-States Development Company and the Company.	**
	4.13.	Demand promissory note and Security Agreement with John Folkerth dated November 13, 2001. Filed as exhibit 4.13 to the Company’s quarterly report on Form 10Q for the quarter ended December 29, 2001.	*
	4.14.	Promissory note and Loan Agreement with Provident Bank dated December 31, 2002. Filed as exhibit 4.14 to the Company’s quarterly report on Form 10Q for the quarter ended December 28, 2002.	*
10. Material Contracts
	Management Contracts and Compensatory Plans or Arrangements
	10.1.	Plan for Providing Tax Return Preparation for Chief Executive Officer, as adopted by the Company’s Board of Directors on February 14, 1985. Filed as exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended April 3, 1993.	*
	10.4.	Disability Plan for Executive Officers, as adopted by the Company’s Board of Directors on November 5, 1991. Filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended March 31, 1992.	*
	10.5	Nonstatutory Stock Option granted by the Company on June 21, 1993 to John R. Folkerth for the purchase, for a period of 10 years from the date of grant of 20,000 Common Shares of the Company at a purchase price of $3.00 per share. Filed as Exhibit 10.7.1 to the Company’s Annual Report on Form 10-K for the year ended April 2, 1994.	*
	10.7.	1995 Stock Option Plan. Filed as exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-64663).	*

Page 14

PageTable 16of Contents

~~Table~~REPORT ofOF ~~Contents~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULE

	10.8.	Amendment to Shopsmith, Inc. 1995 Stock Option Plan dated November 5, 1996. Filed as exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended April 5, 1997.	*
	10.9.	1997 Stock Option Plan. Filed as exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended April 4, 1998.	*
	10.10.	2000 Director Stock Option Plan. Filed as exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended April 1,2000.	*
	10.11.	Shopsmith, Inc. Savings Plan, effective April 1, 1997. Filed as exhibit 10.10 to the Company’s annual report on Form 10-K for the year ended April 5, 1997.	*
Other Material Contracts
	10.14.	Consumer Finance agreement dated November 15, 2000 between CitiFinancial and the Company. Filed as exhibit 10.14 to the Company’s quarterly report on Form 10-Q for the quarter ended December 30, 2000.	*
	10.15.	Receivables factoring agreement with Metro Financial Services dated December 27, 2001. Filed as exhibit 10.15 to the Company’s quarterly report on Form 10-Q for the quarter ended December 29, 2001.	*
13. Annual Report to Security Holders
	13.1.	Shopsmith, Inc. Annual Report to Shareholders For the year ended April 5, 2003. Only such portions of the Annual Report as are specifically incorporated by reference under Parts I, II, and IV of this Report shall be deemed filed as part of this Report.	**
21. Subsidiaries of the Registrant
	21.1.	Subsidiaries of the Registrant.	**
23. Consents of Experts and Counsel
	23.1.	Consent of Crowe Chizek and Company LLC Independent Public Accountants to incorporation by reference.	**

Shareholders and Board of Directors
Shopsmith, Inc.
Dayton, Ohio

~~Page~~Our 17audits of the consolidated financial statements referred to in our report dated May 13, 2005, except for Note 3, for which the date is June 3, 2005, appearing in the Annual Report to Shareholders of Shopsmith, Inc. for the year ended April 2, 2005 (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

~~Table~~/s/ ofCrowe ~~Contents~~Chizek and Company LLC Crowe Chizek and Company LLC

99. Additional Exhibits
	99.1.	Shopsmith, Inc. Employee Stock Purchase Plan. Filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated August 26, 1993.	*
	99.2.	Certification of the form 10-K by John R. Folkerth, the Company’s CEO, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.	**
	99.3.	Certification of the form 10-K by Mark A. May, the Company’s CFO, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.	**

Columbus, Ohio
May 13, 2005

*Page ~~Previously filed ** Filed herewith~~15

PageTable 18of Contents

SHOPSMITH INC. AND SUBSIDIARIES

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED April 2, 2005, April 3, 2004, and April 5, 2003


	BALANCE					CHARGED				BALANCE
	AT					TO COST				AT
	BEGINNING					AND				END
DESCRIPTION	OF PERIOD		TRANSFERS			EXPENSES		DEDUCTIONS		OF PERIOD
YEAR ENDED April 2, 2005
Accrued recourse liability	$	311,768	$	(45,000	)	$	—	$	—	$	266,768
Allowance for doubtful accounts receivable		669,991		45,000			229,841		71,084		873,748

YEAR ENDED April 3, 2004
Accrued recourse liability		351,055		(39,287	)		—		—		311,768
Allowance for doubtful accounts receivable		1,121,198		39,287			280,184		770,678		669,991

YEAR ENDED April 5, 2003
Accrued recourse liability		147,786		(16,342	)		219,611		—		351,055
Allowance for doubtful accounts receivable		891,140		16,342			313,599		99,883		1,121,198

Transfers are made from the accrued recourse liability account to the allowance for doubtful accounts receivable as accounts financed by the Company with Household Retail Services on a recourse basis are purchased by the Company.

Page 16

SHOPSMITH, INC.

INDEX TO EXHIBITS

Exhibit No. and Document


3.	Articles of Incorporation and By-laws

	3.1.	Amended Articles of Incorporation of Shopsmith, Inc., filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-26463).	*

	3.2.	Amended Code of Regulations of Shopsmith, Inc., filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-26463).	*

4.	Instruments Defining the Rights of Security Holders, Including Indentures

	4.10.	Promissory note and mortgage dated December 31, 1998 between Mid-States Development Company and the Company related to the purchase of the 6530 Poe Avenue, Dayton, Ohio property. Filed as exhibit 4.10 to the Company’s quarterly report on Form 10-Q for the quarter ended January 2, 1999.	*

	4.11.	Amendment dated March 11, 2002 to promissory note between Mid-States Development Company and the Company. Filed as exhibit 4.11 to the Company’s Annual Report on Form 10-K for the year ended April 5, 2003.	*

	4.13.	Demand promissory note and Security Agreement with John Folkerth dated November 13, 2001. Filed as exhibit 4.13 to the Company’s quarterly report on Form 10Q for the quarter ended December 29, 2001.	*

	4.14.	Promissory note and Loan Agreement with Provident Bank dated December 31, 2002. Filed as exhibit 4.14 to the Company’s quarterly report on Form 10Q for the quarter ended December 28, 2002.	*

	4.15.	First amendment to loan agreement, promissory note, and security agreement with Provident Bank dated July 17, 2003. Filed as exhibit 4.15 to the Company’s quarterly report on Form 10Q for the quarter ended July 5, 2003.	*

	4.16.	Second amendment to loan agreement, promissory note, and security agreement with The Provident Bank dated June 29, 2004. Filed as exhibit 4.16 to the Company’s quarterly report on Form 10Q for the quarter ended July 3, 2004.	*

	4.17.	Promissory note ($2,000,000) and mortgage dated June 29, 2004 between The Provident Bank and the Company. Filed as exhibit 4.17 to the Company’s quarterly report on Form 10Q for the quarter ended July 3, 2004.	*

	4.18.	Environmental Indemnity Agreement dated June 29, 2004 between The Provident Bank and the Company. Filed as exhibit 4.18 to the Company’s quarterly report on Form 10Q for the quarter ended July 3, 2004.	*

	4.19.	Assignment of Rents and Leases dated June 29, 2004 between The Provident Bank and the Company. Filed as exhibit 4.19 to the Company’s quarterly report on Form 10Q for the quarter ended July 3, 2004.	*

	4.20.	Second amendment to loan agreement with The Provident Bank dated September 24,

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		2004. Filed as exhibit 4.20 to the Company’s quarterly report on Form 10Q for the quarter ended October 2, 2004.	*

	4.21.	Commercial Time Note (Revolving) Agreement executed June 3, 2005 between National City Bank , Successor by merger to The Provident Bank and the Company.	**

	4.22.	Open end mortgage and security agreement executed June 3, 2005 between National City Bank and the Company.	**

10.	Material Contracts

Management Contracts and Compensatory Plans or Arrangements

	10.1.	Plan for Providing Tax Return Preparation for Chief Executive Officer, as adopted by the Company’s Board of Directors on February 14, 1985. Filed as exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended April 3, 1993.	*

	10.4.	Disability Plan for Executive Officers, as adopted by the Company’s Board of Directors on November 5, 1991. Filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended March 31, 1992.	*

	10.5.	Nonstatutory Stock Option granted by the Company on June 21, 1993 to John R. Folkerth for the purchase, for a period of 10 years from the date of grant of 20,000 Common Shares of the Company at a purchase price of $3.00 per share. Filed as Exhibit 10.7.1 to the Company’s Annual Report on Form 10-K for the year ended April 2, 1994.	*

	10.7.	1995 Stock Option Plan. Filed as exhibit 4.3 to the Company’s Registration Statement on Form S-8 (Reg. No. 33-64663).	*

	10.8.	Amendment to Shopsmith, Inc. 1995 Stock Option Plan dated November 5, 1996. Filed as exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended April 5, 1997.	*

	10.9.	1997 Stock Option Plan. Filed as exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended April 4, 1998.	*

	10.10.	2000 Director Stock Option Plan. Filed as exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended April 1,2000.	*

	10.11.	Shopsmith, Inc. Savings Plan, effective April 1, 1997. Filed as exhibit 10.10 to the Company’s annual report on Form 10-K for the year ended April 5, 1997.	*

	10.12.	Fiscal 2004 Bonus Plan for Executive Officers.	*

Other Material Contracts

	10.14.	Consumer Finance agreement dated November 15, 2000 between CitiFinancial and the Company. Filed as exhibit 10.14 to the Company’s quarterly report on Form 10-Q for the quarter ended December 30, 2000.	*

	10.15.	Receivables factoring agreement with Metro Financial Services dated December 27, 2001. Filed as exhibit 10.15 to the Company’s quarterly report on Form 10-Q for the quarter ended December 29, 2001.	*

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	10.16.	Purchase agreement dated April 26, 2005 for the sale of receivables by the Company to Citizens Finance Company	*

	10.17.	Consumer Finance agreement dated April 26, 2005 between Citizens Finance Company and the Company.	**

13.	Annual Report to Security Holders

	13.1.	Shopsmith, Inc. Annual Report to Shareholders for the year ended April 2, 2005. Only such portions of the Annual Report as are specifically incorporated by reference under Parts I, II, and IV of this Report shall be deemed filed as part of this Report.	**

14.	Code of Ethics

	14.1.	Code of Ethics adopted January 26, 2004. Filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the year ended April 3, 2004	*

21.	Subsidiaries of the Registrant

	21.1.	Subsidiaries of the Registrant.	**

23.	Consents of Experts and Counsel

	23.1.	Consent of Crowe Chizek and Company LLC, Independent Registered Public Accounting Firm.	**

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31.	Certifications

		31.1.	Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	**

		31.2.	Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	**

		32.1.	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	**

		32.2.	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	**

99.	Additional Exhibits

		99.1.	Shopsmith, Inc. Employee Stock Purchase Plan. Filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated August 26, 1993.	*

*		Previously filed

**		Filed herewith

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Filing Compare · SHOPSMITH INC