UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~November~~February 3028, ~~2025~~2026


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

For the transition period from to

Commission File Number: 0-3498

Taylor Devices, Inc.

(Exact name of registrant as specified in its charter)


New York		16-0797789

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

90 Taylor Drive, North Tonawanda, New York		14120

(Address of principal executive offices)		(Zip Code)

716-694-0800

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $.025 par value per share

Preferred Stock Purchase Rights

TAYD

N/A

The Nasdaq Stock Market LLC

The Nasdaq Stock Market LLC

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of ~~December~~March 31, ~~2025~~2026 was 3,~~153~~219,~~117~~112.

TAYLOR DEVICES, INC.

Index to Form 10-Q

PART I	FINANCIAL INFORMATION		PAGE NO.
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets as of November 30, 2025 and May 31, 2025	4
		Condensed Consolidated Balance Sheets as of February 28, 2026 and May 31, 2025	4
		Condensed Consolidated Statements of Income for the three and six months ended November 30, 2025 and November 30, 2024	5
		Condensed Consolidated Statements of Income for the three and nine months ended February 28, 2026 and February 28, 2025	5
		Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended November 30, 2025 and November 30, 2024	6
		Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended February 28, 2026 and February 28, 2025	6
		Condensed Consolidated Statements of Cash Flows for the six months ended November 30, 2025 and November 30, 2024	7
		Condensed Consolidated Statements of Cash Flows for the nine months ended February 28, 2026 and February 28, 2025	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
	Item 4.	Controls and Procedures	17
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	18
	Item 1A.	Risk Factors	18
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
	Item 3.	Defaults Upon Senior Securities	18
	Item 4.	Mine Safety Disclosures	18
	Item 5.	Other Information	18
	Item 6.	Exhibits	19
SIGNATURES		20

Part I – Financial Information Item 1. Financial Statements TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets	(Unaudited)
	November 30,	May 31,
	February 28,	May 31,
	2025	2025
	2026	2025
Assets
Current assets:
Cash and cash equivalents	$12,~~956~~530,~~030~~424	$1,190,656
Short-term investments	3839,~~787~~181,~~922~~924	34,799,367
Accounts receivable, net	54,~~180~~863,~~955~~234	5,599,785
Inventory	7,~~867~~481,~~303~~184	8,113,321
Costs and estimated earnings in excess of billings	25,~~424~~681,~~165~~210	5,360,499
Other current assets	1,~~712~~371,~~737~~101	1,219,211
Total current assets	5761,~~929~~109,~~112~~077	56,282,839
Maintenance and other inventory, net	1783,~~162,840~~353	1,107,875
Property and equipment, net	12,~~659~~702,~~629~~256	12,074,172
Patents, net	~~259~~253,~~258~~702	270,370
Other assets	~~287~~288,~~279~~323	284,864
Deferred income taxes	~~546~~316,000	1,598,000
	$72,844,118	$71,618,120
	$75,452,711	$71,618,120
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$1,~~616~~129,~~645~~072	$1,119,240
Accrued expenses	2,~~544~~772,~~802~~627	4,072,436
Billings in excess of costs and estimated earnings	1,~~621~~404,~~647~~085	4,382,067
Total current liabilities	5,~~783~~305,~~094~~784	9,573,743
Stockholders' equity:
Common stock and additional paid-in capital	1516,~~531~~733,~~385~~835	14,649,415
Retained earnings	6467,~~738~~237,~~862~~002	60,540,154
	80,270,247	75,189,569
	83,970,837	75,189,569
Treasury stock - at cost	(13,~~209~~823,~~223~~910)	(13,145,192)
Total stockholders’ equity	6770,~~061~~146,~~024~~927	62,044,377
	$72,844,118	$71,618,120
	$75,452,711	$71,618,120

See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income	(Unaudited)		(Unaudited)
	For the three months ended		For the ~~six~~nine months ended
	November 30,2025	November 30,2024	November 30,2025	November 30,2024
	February 28,2026	February 28,2025	February 28,2026	February 28,2025
Sales, net	$11,~~603~~173,~~472~~201	$810,~~548~~564,~~881~~834	$2132,~~521~~695,~~822~~023	$2030,~~166~~731,~~737~~571
Cost of goods sold	6,~~144~~681,~~121~~721	46,~~662~~035,~~781~~961	1118,~~623~~305,~~727~~448	1016,~~777~~812,~~007~~968
Gross profit	54,~~459~~491,~~351~~480	34,~~886~~528,~~100~~873	914,~~898~~389,~~095~~575	913,~~389~~918,~~730~~603
Research and development costs	~~214~~63,~~370~~015	~~102~~146,~~922~~749	~~295~~358,~~187~~202	~~172~~318,~~114~~863
Selling, general and administrative expenses	32,~~015~~112,~~688~~772	2,~~838~~362,~~993~~522	57,~~128~~241,~~348~~120	57,~~368~~731,~~530~~052
Operating income	2,~~229~~315,~~293~~693	~~944~~2,~~185~~019,602	46,~~474~~790,~~560~~253	35,~~849~~868,~~086~~688
Other income	~~424~~422,~~331~~447	~~307~~325,~~871~~643	~~808~~1,~~148~~230,595	~~684~~1,~~625~~010,268
Income before provision for income taxes	2,~~653~~738,~~624~~140	12,~~252~~345,~~056~~245	58,~~282~~020,~~708~~848	46,~~533~~878,~~711~~956
Provision for income taxes	~~645~~240,000	~~195~~343,~~896~~000	1,~~084~~324,000	~~810~~1,153,896
Net income	$2,~~008~~498,~~624~~140	$12,~~056~~002,~~160~~245	$46,~~198~~696,~~708~~848	$35,~~722~~725,~~815~~060
Basic and diluted earnings per common share	$0.6479	$0.3464	$12.3312	$1.1983

See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Stockholders’ Equity
	(Unaudited)		(Unaudited)
	For the three months ended		For the ~~six~~nine months ended
	November 30,2025	November 30,2024		November 30,2025	November 30,2024
	February 28,2026	February 28,2025		February 28,2026	February 28,2025
Common Stock
Beginning of period	$104,~~921~~940	$104,~~076~~564		$104,835	$104,056
Issuance of shares for employee stock purchase plan	-1	1		12	23
Issuance of shares for employee stock option plan	191,225	~~487~~19		~~104~~1,329	~~506~~525
End of period	~~104~~106,~~940~~166	104,~~564~~584		~~104~~106,~~940~~166	104,~~564~~584
Paid-in Capital
Beginning of period	1415,~~592~~426,~~888~~445	1213,~~970~~920,~~524~~041		14,544,580	12,959,531
Issuance of shares for employee stock purchase plan	1,~~071~~217	1,~~234~~408		23,~~387~~604	35,~~660~~068
Issuance of shares for employee stock option plan	321,~~516~~200,007	~~217~~8,~~079~~712		791,~~508~~279,515	~~225~~234,~~646~~358
Stock options issued for services	~~799,970~~-	~~731,204~~-		799,970	731,204
End of period	1516,~~426~~627,~~445~~669	13,~~920~~930,~~041~~161		1516,~~426~~627,~~445~~669	13,~~920~~930,~~041~~161
Retained Earnings
Beginning of period	6264,~~730~~738,~~238~~862	5354,~~793~~849,~~673~~833		60,540,154	51,127,018
Net income	2,~~008~~498,~~624~~140	12,~~056~~002,~~160~~245		46,~~198~~696,~~708~~848	35,~~722~~725,~~815~~060
End of period	6467,~~738~~237,~~862~~002	5456,~~849~~852,~~833~~078		6467,~~738~~237,~~862~~002	5456,~~849~~852,~~833~~078
Treasury Stock
Beginning of period	(13,~~176~~209,~~688~~223)	(1213,~~943~~075,~~919~~461)		(13,145,192)	(12,943,919)
Issuance of shares for employee stock option plan	(32614,~~535~~687)	(~~131~~8,~~542~~731)		(64678,~~031~~718)	(~~131~~140,~~542~~273)
End of period	(13,~~209~~823,~~223~~910)	(13,~~075~~084,~~461~~192)		(13,~~209~~823,~~223~~910)	(13,~~075~~084,~~461~~192)
Total stockholders' equity	$6770,~~061~~146,~~024~~927	$5557,~~798~~802,~~977~~631		$6770,~~061~~146,~~024~~927	$5557,~~798~~802,~~977~~631

See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
	(Unaudited)
For the six months ended	November 30,2025	November 30,2024
For the nine months ended	February 28,2026	February 28,2025
Operating activities:
Net income	$46,~~198~~696,~~708~~848	$35,~~722~~725,~~815~~060
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation	~~905~~1,~~676~~378,264	~~833~~1,~~399~~386,620
Amortization	1116,~~112~~668	1116,~~112~~668
Stock options issued for services	799,970	731,204
Deferred income taxes	1,~~052~~282,000	-
Changes in other assets and liabilities:
Accounts receivable, net	~~418~~736,~~830~~551	(31,~~035~~504,~~297~~248)
Inventory	~~191~~956,~~053~~659	(~~946~~943,~~432~~946)
Costs and estimated earnings in excess of billings	2(320,~~936,334~~711)	1,~~338~~126,~~924~~813
Other current assets	(~~493~~151,~~526~~890)	(1,~~374~~476,~~126~~833)
Accounts payable	~~497~~9,~~405~~832	(~~581~~324,~~496~~137)
Accrued expenses	(1,~~527~~299,~~634~~809)	(23,~~293~~206,~~115)~~098
Billings in excess of costs and estimated earnings	(2,~~760~~977,~~420~~982)	(12,~~893~~368,~~366~~711)
Net operating activities	6,229,508	(3,486,378)
Other assets	-	(38,077)
Net operating activities	7,126,400	5,536,511
Investing activities:
Acquisition of property and equipment	(12,~~491~~006,~~133~~348)	(~~970~~1,~~569~~157,996)
(Increase)/decrease in short-term investments	(3,988,555)	3,884,997
Increase in short-term investments	(4,382,557)	(5,004,432)
Other investing activities	(23,~~415~~459)	(23,~~460~~531)
Net investing activities	(56,~~482~~392,~~103~~364)	2(6,~~911~~165,~~968~~959)
Financing activities:
Proceeds from issuance of common stock, net	821,~~000~~284,450	~~229~~239,~~814~~954
Acquisition of treasury stock	(64678,~~031~~718)	(~~131~~140,~~542~~273)
Net financing activities	17605,~~969~~732	9899,~~272~~681
Net change in cash and cash equivalents	~~765~~1,~~374~~339,768	(~~476~~529,~~138~~767)
Cash and cash equivalents - beginning	1,190,656	2,831,471
Cash and cash equivalents - ending	$12,~~956~~530,~~030~~424	$2,~~355~~301,~~333~~704

See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC.

Notes to Condensed Consolidated Financial Statements

1.The accompanying unaudited condensed consolidated 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-Q. Accordingly, they do not include all 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 consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company’s financial position as of ~~November~~February 3028, ~~2025~~2026 and May 31, 2025, results of operations for the three and ~~six~~nine months ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, and cash flows for the ~~six~~nine months ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended May 31, 2025, filed with the U.S. Securities and Exchange Commission (“SEC”) on August 15, 2025 (the “Form 10-K”).

2.The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued.

3.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.

4.For the ~~six~~nine-month periods ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, the net income was divided by 3,~~146~~156,~~606~~936 and 3,~~124~~127,~~720~~722 respectively, which is net of the Treasury shares, to calculate the net income per share. For the three-month periods ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, net income was divided by 3,~~147~~167,~~518~~732 and 3,~~127~~136,~~793~~469 respectively, which is net of the Treasury shares, to calculate the net income per share.

5.The results of operations for the three and ~~six~~nine-month periods ended ~~November~~February 3028, ~~2025~~2026 are not necessarily indicative of the results to be expected for the full year.

6.In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the effective tax rate reconciliation and income taxes paid by jurisdiction. ASU 2023-09 is effective for our annual periods beginning June 1, 2025, with early adoption permitted on a prospective basis. The Company is currently evaluating the potential effect that the updated standard will have on the financial statements and related disclosures.

In November 2024, the FASB issued ASU ~~2024~~2025-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to enhance disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation, and intangible asset amortization) included in certain expense captions presented on the face of the income statement. ASU ~~2024~~2025-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted on a prospective basis for financial statements issued for reporting periods after the forementioned effective date. The Company is currently evaluating the potential effect that the updated standard will have on the financial statements and related disclosures.

Other recently issued FASB Accounting Standards Codification (“FASB ASC”) guidance has either been implemented or is not significant to the Company.

7.Short-term Investments:

At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at ~~November~~February 3028, ~~2025~~2026 and May 31, 2025 include money market funds, U.S. treasury securities and corporate bonds stated at fair value, which approximates cost. Unrealized holding gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of investments are determined using the specific identification method.

The short-term investments are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.

8.Inventory:

	November 30, 2025	May 31, 2025
	February 28, 2026	May 31, 2025
Raw materials	$~~515~~600,~~913~~603	$627,616
Work-in-process	6,~~963~~721,~~766~~099	7,222,613
Finished goods	~~410~~194,~~624~~482	286,092
	7,890,303	8,136,321
	7,516,184	8,136,321
Less allowance for obsolescence	2335,000	23,000
	$7,867,303	$8,113,321
	$7,481,184	$8,113,321

9.Revenue Recognition:

Revenue is recognized (generally at fixed prices) when, or as, the Company transfers control of promised products or services to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct. Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations.

For contracts with customers in which the Company satisfies a promise to the customer to provide a product that has no alternative use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the Company satisfies the performance obligation and recognizes revenue over time (generally less than one year) using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material and overhead. Adjustments to cost estimates are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. Other sales to customers are recognized upon shipment to the customer based on contract prices and terms. In the ~~six~~nine months ended ~~November~~February 3028, ~~2025~~2026, 5453% of revenue was recorded for contracts in which revenue was recognized over time while 4647% was recognized at a point in time. In the ~~six~~nine months ended ~~November~~February 3028, ~~2024~~2025, 63% of revenue was recorded for contracts in which revenue was recognized over time while 37% was recognized at a point in time.

Progress payments are typically negotiated for longer-term projects. Payments are otherwise due once performance obligations are complete (generally at shipment and transfer of title). For financial statement presentation purposes, the Company nets progress billings against the total costs incurred and estimated earnings recognized on uncompleted contracts. The asset, “costs and estimated earnings in excess of billings,” represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings,” represents billings in excess of revenues recognized.

If applicable, the Company recognizes an asset for the incremental, material costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year and the costs are expected to be recovered. As of ~~November~~February 3028, ~~2025~~2026 and May 31, 2025, the Company does not have material incremental costs on any open contracts with an original expected duration of greater than one year, and therefore such costs are expensed as incurred. These incremental costs include, but are not limited to, sales commissions incurred to obtain a contract with a customer.

10.Accrued Expenses:

	November 30, 2025	May 31, 2025
	February 28, 2026	May 31, 2025
Customer deposits	$1480,~~071~~338	$104,825
Personnel costs	1,~~781~~863,~~465~~728	3,214,157
Other	~~749~~828,~~266~~561	753,454
	$2,544,802	$4,072,436
	$2,772,627	$4,072,436

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

Cautionary Statement

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Information in this Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Form 10-Q that does not consist of historical facts are "forward-looking statements." Statements accompanied or qualified by, or containing, words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," and "assume" constitute forward-looking statements and, as such, are not a guarantee of future performance. These statements involve factors, risks and uncertainties, the impact or occurrence of which can cause actual results to differ materially from the expected results described in such statements. Risks and uncertainties can include, among others: reductions in capital budgets by our customers and potential customers; changing product demand and industry capacity; increased competition and pricing pressures; advances in technology that can reduce the demand for the Company's products; the kind, frequency and intensity of natural disasters that affect demand for the Company’s products; and other factors, many or all of which are beyond the Company's control. Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results. Except as may be required by law, the Company disclaims any obligation to release publicly any updates or revisions to the forward-looking statements herein to reflect any change in the Company's expectations with regard thereto, or any changes in events, conditions or circumstances on which any such statement is based.

Results of Operations

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

Summary comparison of the six months ended November 30, 2025 and November 30, 2024
Summary comparison of the nine months ended February 28, 2026 and February 28, 2025
		Increase /
		(Decrease)
Sales, net		$1,~~355~~963,000
Cost of goods sold		$~~847~~1,492,000
Research and development costs		$~~123~~39,000
Selling, general and administrative expenses		$(~~241~~490,000)
Other income		$~~123~~220,000
Income before provision for income taxes		$~~749~~1,142,000
Provision for income taxes		$~~273~~170,000
Net income		$~~476~~972,000

Sales under certain fixed-price contracts, in which the product has no alternative use to the Company and the Company has enforceable rights to payment for progress completed to date, inclusive of profit, are recognized over time whereby revenues are based on estimates of completion prepared on a ratio of cost to total estimated cost basis. Costs include all material and direct and indirect charges related to specific contracts.

Adjustments to cost estimates are made periodically and any losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. However, any profits expected on contracts in progress are recognized over the life of the contract.

For financial statement presentation purposes, the Company nets progress billings against the total costs incurred and estimated earnings recognized on uncompleted contracts. The asset, "costs and estimated earnings in excess of billings," represents revenues recognized in excess of amounts billed. The liability, "billings in excess of costs and estimated earnings," represents billings in excess of revenues recognized.

For the ~~six~~nine months ended ~~November~~February 3028, ~~2025~~2026 (All figures discussed are for the ~~six~~nine months ended ~~November~~February 3028, ~~2025~~2026, as compared to the ~~six~~nine months ended ~~November~~February 3028, ~~2024~~2025).

	Six months ended		Change
	Nine months ended		Change
	November 30,2025	November 30,2024	Amount	Percent
	February 28,2026	February 28,2025	Amount	Percent
Net Revenue	$21,522,000	$20,167,000	$1,355,000	7%
Net revenue	$32,695,000	$30,732,000	$1,963,000	6%
Cost of goods sold	1118,~~624~~305,000	1016,~~777~~813,000	~~847~~1,492,000	89%
Gross profit	$914,~~898~~390,000	$913,~~390~~919,000	$~~508~~471,000	53%
… as a percentage of net revenue	4644%	4745%

The Company's consolidated results of operations showed a 76% increase in net revenue and a 1317% increase in net income. Revenue recorded in the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 for long-term projects was 911% lower than the level recorded in the prior year. The Company had 3137 long-term projects in process during the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 as compared to 2731 during the same period last year. Revenue recorded in the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 for other-than long-term projects was 3435% higher than the level recorded in the prior year. Total sales within the U.S. during the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 increased 1512% from the same period last year. Total sales outside the U.S. during the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 decreased 3221% from the same period of the prior year. The shift in domestic and international sales concentration from the prior year is attributable to normal changes in structural project activity. Sales increases were recorded over the same period last year to aerospace / defense customers (22%) with decreases to customers involved in construction of buildings and bridges (4-16%) and ~~aerospace / defense (9%) as well as~~ industrial customers (1-12%). The increase in total sales from the prior year is attributable to differences in the timing of backlog conversion to revenue.

The gross profit as a percentage of net revenue of 4644% in the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 is one percentage point lower than the same period of the prior year (4745%).

Sales of the Company’s products are made to three general groups of customers: industrial, structural and aerospace / defense. A breakdown of sales to the three general groups of customers is as follows:

	Six months ended
	Nine months ended
	November 30,2025	November 30,2024
	February 28,2026	February 28,2025
Industrial	10%	1211%
Structural	2924%	2931%
Aerospace / Defense	6166%	5958%

At ~~November~~February 3028, ~~2024~~2025, the Company had ~~156~~146 open sales orders in its backlog with a total sales value of $3433.53 million. At ~~November~~February 3028, ~~2025~~2026, the Company had ~~134~~116 open sales orders in its backlog with a total sales value of $2520.18 million. The Company expects to recognize revenue for the majority of the backlog during fiscal years 2026 and 2027.

The Company's backlog, revenues, gross profits, and net income fluctuate from period to period. The changes in the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026, compared to the same period in the prior year, are not necessarily representative of future results.

Net revenue by geographic region, as a percentage of total net revenue for the ~~six~~nine-month periods ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, is as follows:

	Six months ended
	Nine months ended
	November 30,2025	November 30,2024
	February 28,2026	February 28,2025
U.S.	8887%	8283%
Asia	7%	1110%
Other	56%	7%

Research and Development Costs

	Six months ended		Change
	Nine months ended		Change
	November 30,2025	November 30,2024	Amount	Percent
	February 28,2026	February 28,2025	Amount	Percent
R & D	$ ~~295~~358,000	$ ~~172~~319,000	$ ~~123~~39,000	7212%
… as a percentage of net revenue	1.41%	01.90%

Research and development costs increased $~~123~~39,000 from the same period in the prior year.

Selling, General and Administrative Expenses

	Six months ended		Change
	Nine months ended		Change
	November 30,2025	November 30,2024	Amount	Percent
	February 28,2026	February 28,2025	Amount	Percent
S G & A	$ 57,~~128~~241,000	$ 57,~~369~~731,000	$ (~~241~~490,000)	-46%
… as a percentage of net revenue	2422%	2725%

Selling, general and administrative expenses during the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 decreased by 46% from the same period in the prior year. This change is primarily due to lower employee incentive compensation accruals. The Company expenses stock options using the fair value recognition provisions of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”). The Company recognized $800,000 (47,850 options granted) and $731,000 (46,800 options granted) of compensation cost for the ~~six~~nine-month periods ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, respectively.

Operating Income

Operating income was $46,~~475~~790,000 for the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026, higher than $35,~~849~~869,000 in the same period of the prior year. The increase in operating income is attributable to ~~higher~~increased ~~gross~~revenue ~~margin~~and ~~associated~~lower ~~with~~selling, ~~increased~~general ~~revenue~~and administrative expenses.

Other Income

Other income was $~~808~~1,231,000 for the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026, ana 1822% increase from the same period of the prior year. This increase was driven by short-term investment interest income.

Summary comparison of the three months ended November 30, 2025 and November 30, 2024
Summary comparison of the three months ended February 28, 2026 and February 28, 2025
		Increase /
		(Decrease)
Sales, net		$3608,~~054,~~000
Cost of goods sold		$1646,~~481,~~000
Research and development costs		$~~111~~(84,000)
Selling, general and administrative expenses		$~~177~~(250,000)
Other income		$~~116~~97,000
Income before provision for income taxes		$1393,~~401,~~000
Provision for income taxes		$~~449~~(103,000)
Net income		$~~952~~496,000

For the three months ended ~~November~~February 3028, ~~2025~~2026 (All figures discussed are for the three months ended ~~November~~February 3028, ~~2025~~2026 as compared to the three months ended ~~November~~February 3028, ~~2024~~2025).

	Three months ended		Change
	November 30,2025	November 30, 2024	Amount	Percent
	February 28,2026	February 28, 2025	Amount	Percent
Net Revenue	$11,603,000	$8,549,000	$3,054,000	36%
Net revenue	$11,173,000	$10,565,000	$608,000	6%
Cost of goods sold	6,~~144~~682,000	46,~~663~~036,000	1646,~~481,~~000	3211%
Gross profit	$54,~~459~~491,000	$34,~~886~~529,000	$1(38,~~573,~~000)	40-1%
… as a percentage of net revenue	4740%	4543%

The Company's consolidated results of operations showed a 366% increase in net revenue and 9025% increase in net income. Revenue recorded in the quarter ended ~~November~~February 3028, ~~2025~~2026 for long-term projects was 713% ~~higher~~lower than the level recorded in the prior year. The Company had 2523 long-term projects in process during the quarter ended ~~November~~February 3028, ~~2025~~2026 as compared to 2221 during the same period last year. Revenue recorded in the quarter ended ~~November~~February 3028, ~~2025~~2026 for other-than long-term projects was 9137% higher than the level recorded in the prior year. Total sales within the U.S. during the quarter ended ~~November~~February 3028, ~~2025~~2026 increased 456% from the same period last year. Total sales outside the U.S. during the quarter ended ~~November~~February 3028, ~~2025~~2026 ~~decreased~~increased 304% from the same period of the prior year. The shift in domestic and international sales concentration from the prior year is attributable to normal changes in structural project activity. Sales ~~to customers involved in the construction of buildings and bridges decreased 6% while sales~~ increases were recorded over the same period last year to aerospace / defense customers (47%) with decreases to customers involved in ~~aerospace~~construction /of ~~defense~~buildings and bridges (58-49%), and industrial customers (29-35%). The increases in total sales from the prior year is attributable to differences in the timing of backlog conversion to revenue.

The gross profit as a percentage of net revenue of 4740% in the quarter ended ~~November~~February 3028, ~~2025~~2026 is ~~two~~three percentage points ~~higher~~lower than the same period of the prior year (4543%).

	Three months ended
	November 30,2025	November 30,2024
	February 28,2026	February 28,2025
Industrial	107%	1112%
Structural	2116%	3033%
Aerospace / Defense	6977%	5955%

Net revenue by geographic region, as a percentage of total net revenue for the three-month periods ended ~~November~~February 3028, ~~2025~~2026 and ~~November~~February 3028, ~~2024~~2025, is as follows:

	Three months ended
	November 30,2025	November 30,2024
	February 28,2026	February 28,2025
U.S.	9484%	8884%
Asia	49%	79%
Other	27%	57%

Research and Development Costs

	Three months ended		Change
	November 30,2025	November 30,2024	Amount	Percent
	February 28,2026	February 28,2025	Amount	Percent
R & D	$ ~~214~~63,000	$ ~~103~~147,000	$ ~~111~~(84,000)	~~108~~-57%
… as a percentage of net revenue	10.86%	1.24%

Research and development costs ~~increased~~decreased $~~111~~84,000 from the prior year.

Selling, General and Administrative Expenses

	Three months ended		Change
	November 30,2025	November 30,2024	Amount	Percent
	February 28,2026	February 28,2025	Amount	Percent
S G & A	$ 32,~~016~~112,000	$ 2,~~839~~362,000	$ ~~177~~(250,000)	6-11%
… as a percentage of net revenue	2619%	3322%

Selling, general and administrative expenses during the quarter ended ~~November~~February 3028, ~~2025~~2026 ~~increased~~decreased 611% from the same period in the prior year. ~~The~~This ~~Company~~change ~~expenses~~is ~~stock~~primarily ~~options~~due ~~using~~to ~~the~~lower ~~fair~~incentive ~~value recognition provisions of the FASB ASC. The Company recognized $800,000 (47,850 options granted) and $731,000 (46,800 options granted) of~~ compensation ~~cost for the three-month periods ended November 30, 2025 and November 30, 2024, respectively~~accruals.

Operating Income

Operating income was $2,~~229~~316,000 for the three months ended ~~November~~February 3028, ~~2025~~2026, higher than $~~944~~2,020,000 in the same period of the prior year. The increase in operating income is attributable to ~~higher~~lower ~~gross~~selling, ~~margin~~general ~~associated~~and ~~with~~administrative ~~increased revenue~~expenses.

Other Income

Other income was $~~424~~422,000 for the three months ended ~~November~~February 3028, ~~2025~~2026, a 3830% increase from the same period of the prior year. This increase was driven by short-term investment interest income.

Liquidity and Capital Resources

The Company’s primary liquidity requirements depend on its working capital needs. Working capital consists primarily of cash and short-term investments, inventory, accounts receivable, costs and estimated earnings in excess of billings, accounts payable, accrued expenses and billings in excess of costs and estimated earnings. The Company’s primary source of liquidity has been excess cash flow from operations.

Capital expenditures for the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026 were $12,~~491~~006,000 compared to $~~971~~1,158,000 in the same period of the prior year. As of ~~November~~February 3028, ~~2025~~2026, the Company has commitments for capital expenditures totaling $1,~~732~~610,000 during the next twelve months. The Company is evaluating additional capital expenditures to expand capacity.

Inventory and Maintenance Inventory

	November 30, 2025		May 31, 2025		Increase /(Decrease)
	February 28, 2026		May 31, 2025		Increase /(Decrease)
Raw materials	$~~516~~601,000		$627,000		$(~~111~~26,000)	-184 %
Work-in-process	6,~~963~~721,000		7,223,000		(~~260~~502,000)	-47 %
Finished goods	~~388~~159,000		263,000		~~125~~(104,000)	48-40 %
Inventory	7,~~867~~481,000	8791%	8,113,000	88%	(~~246~~632,000)	-38 %
Maintenance and other inventory	1783,~~163,~~000	139%	1,108,000	12%	55(325,000)	5-29 %
Total	$98,~~030~~264,000	100%	$9,221,000	100%	$(~~191~~957,000)	-210 %
Inventory turnover	2.58		2.7

NOTE: Inventory turnover is annualized for the ~~six~~nine-month period ended ~~November~~February 3028, ~~2025~~2026.

Inventory, at $7,481,000 as of February 28, 2026, is $632,000 lower than the prior year-end level of $8,113,000. As of February 28, 2026, approximately 90% of the inventory was work-in-process, 2% was finished goods, and 8% was raw materials.

~~Inventory,~~Maintenance atand ~~$7,867,000~~other asinventory represent stock that is estimated to have a product life cycle in excess of ~~November~~twelve ~~30,~~months. ~~2025,~~This stock represents certain items the Company is ~~$246,000~~required ~~lower~~to ~~than~~maintain for service of products sold and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to technological obsolescence in the ~~prior~~near ~~year-end~~term ~~level~~due to its use in industries characterized by the continuous introduction of $8new product lines,~~113,000~~ rapid technological advances and product obsolescence. AsManagement of ~~November~~the 30Company has, ~~2025~~from time to time, ~~approximately~~recorded ~~88%~~an ofallowance ~~the~~for potential inventory obsolescence. The provision for potential inventory obsolescence was ~~work-in-process~~$195,000 5%and ~~was~~zero ~~finished~~for ~~goods~~the nine-month periods ended February 28, 2026 and 7%February ~~was~~28, ~~raw~~2025, ~~materials~~respectively.

Maintenance and other inventory represent stock that is estimated to have a product life cycle in excess of twelve months. This stock represents certain items the Company is required to maintain for service of products sold and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to technological obsolescence in the near term due to its use in industries characterized by the continuous introduction of new product lines, rapid technological advances and product obsolescence. Management of the Company has, from time to time, recorded an allowance for potential inventory obsolescence. The provision for potential inventory obsolescence was $145,000 and zero for the six-month periods ended November 30, 2025 and November 30, 2024, respectively.

Accounts Receivable, Costs and Estimated Earnings in Excess of Billings (“CIEB"), and Billings in Excess of Costs and Estimated Earnings ("BIEC")

	November 30, 2025	May 31, 2025	Increase /(Decrease)
	February 28, 2026	May 31, 2025	Increase /(Decrease)
Accounts receivable	$54,~~181~~863,000	$5,600,000		$(~~419~~737,000)	-713%
CIEB	25,~~424~~681,000	5,360,000		(2321,~~936,~~000)	~~-55~~6%
Less: BIEC	1,~~622~~404,000	4,382,000		(2,~~760~~978,000)	-6368%
Net	$59,~~983~~140,000	$6,578,000		$~~(595~~2,562,000)	-939%
Number of an average day’s salesoutstanding in accounts receivable	4039	32

The Company combines the totals of accounts receivable, the current asset, CIEB, and the current liability, BIEC, to determine how much cash the Company will eventually realize from revenue recorded to date. As the accounts receivable figure rises in relation to the other two figures, the Company can anticipate increased cash receipts within the ensuing 30-60 days.

Accounts receivable of $54,~~181~~863,000 as of ~~November~~February 3028, ~~2025~~2026 is net of $~~394~~319,000 of an allowance for estimated credit losses (“Allowance”). The accounts receivable balance as of May 31, 2025 of $5,600,000 is net of an Allowance of $564,000. The decrease to the Allowance was due to collections against an overdue structural project balance. After discussions with the customer regarding payment of this balance, the overdue balance has been reduced from $751,000 at prior year end to $~~350~~111,000 at ~~November~~February 3028, ~~2025~~2026. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 32 days at May 31, 2025 to 4039 days at ~~November~~February 3028, ~~2025~~2026. The DSO is a function of (1) the level of sales for an average day (for example, total sales for the past three months divided by 90 days) and (2) the level of accounts receivable at the balance sheet date. The Company expects to collect the net accounts receivable balance during the next twelve months.

As noted above, CIEB represents revenues recognized in excess of amounts billed. Whenever possible, the Company negotiates a provision in sales contracts to allow the Company to bill, and collect from the customer, payments in advance of shipments. Unfortunately, these contract provisions are often not possible to obtain. The $25,~~424~~681,000 balance in CIEB at ~~November~~February 3028, ~~2025~~2026 is 556% ~~lower~~higher than the prior year-end balance. This ~~decrease~~increase is the result of normal flow of long-term projects through production with billings to the customers as permitted in the related contracts. 7133% of the CIEB balance as of the end of the last fiscal quarter, ~~August~~November 3130, 2025, was billed to those customers in the fiscal quarter ended ~~November~~February 3028, ~~2025~~2026. The remainder will be billed as the projects progress, in accordance with the terms specified in the various contracts.

The balances in CIEB are comprised of the following components:

	November 30, 2025	May 31, 2025
	February 28, 2026	May 31, 2025
Costs	$6,~~314~~091,000	$8,514,000
Estimated Earnings	64,~~605~~041,000	9,289,000
Less: Billings to customers	104,~~495~~451,000	12,443,000
CIEB	$25,~~424~~681,000	$5,360,000
Number of projects in progress	1218	14

As noted above, BIEC represents billings to customers in excess of revenues recognized. The $1,~~622~~404,000 balance in BIEC at ~~November~~February 3028, ~~2025~~2026 is down 6368% from the $4,382,000 balance at the end of the prior year. The balance in BIEC fluctuates in the same manner and for the same reasons as the CIEB, discussed above. Final delivery of product under these contracts is expected to occur during the next twelve months.

The balances in BIEC are comprised of the following components:

	November 30, 2025	May 31, 2025
	February 28, 2026	May 31, 2025
Billings to customers	$814,~~174~~936,000	$12,253,000
Less: Costs	35,~~752~~738,000	3,985,000
Less: Estimated Earnings	27,~~800~~794,000	3,886,000
BIEC	$1,~~622~~404,000	$4,382,000
Number of projects in progress	75	7

Summary of factors affecting the balances in CIEB and BIEC:

	November 30, 2025	May 31, 2025
	February 28, 2026	May 31, 2025
Number of projects in progress	1923	21
Aggregate percent complete	7173%	65%
Average total sales value of projects in progress	$1,~~394~~383,000	$1,846,000
Percentage of total value invoiced to customer	7061%	64%

The Company's backlog of sales orders at ~~November~~February 3028, ~~2025~~2026 is $2520.18 million, down from $27.1 million at the end of the prior year. Of the Company’s backlog as of ~~November~~February 3028, ~~2025~~2026, $78.02 million was on projects already in progress.

Other Balance Sheet Items

Accounts payable, at $1,~~617~~129,000 as of ~~November~~February 3028, ~~2025~~2026, is 441% higher than the prior year-end. Accrued expenses decreased 3832% from the prior year-end, to $2,~~545~~773,000, due to ~~the~~a ~~payout~~reduction of ~~fiscal~~accrued ~~year 2025~~ incentive compensation. The Company expects the accrued amounts to be paid or applied during the next twelve months.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information called for by this item.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

The Company's chief executive officer (its principal executive officer) and chief financial officer (its principal financial officer) have evaluated the Company's disclosure controls and procedures as of ~~November~~February 3028, ~~2025~~2026 and have concluded that as of the evaluation date, the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

There have been no changes in the Company's internal controls over financial reporting that occurred during the fiscal quarter ended ~~November~~February 3028, ~~2025~~2026 that have materially affected, or are reasonably likely to materially affect, the Company's control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

Refer to Note 17, “Legal Proceedings,” to the Consolidated Financial Statements in the Company’s Form 10-K for information regarding the Company’s legal proceedings. There have been no material developments in any legal proceedings that require reporting in this Form 10-Q.

Item 1A. Risk Factors

Smaller reporting companies are not required to provide the information called for by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended ~~November~~February 3028, ~~2025~~2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

	3	Articles of incorporation and by-laws.
		(i)	Restated Certificate of Incorporation, as amended, incorporated by reference to Exhibit (3)(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, ~~2024~~2025, filed August 15, ~~2024~~2025.
		(ii)	By-laws, incorporated by reference to Exhibit 3(v) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2022, filed January 6, 2023.
	4	Instruments defining the rights of security holders.
		(i)	Rights Agreement by and between the Registrant and Computershare Trust Company, N.A., incorporated by reference to Exhibit 4 to the Registrant’s Registration Statement on Form 8-A, filed October 5, 2018.
		(ii)	Letter to Holders of the Registrant’s Common Stock, incorporated by reference to Exhibit 20 to the Registrant’s Registration Statement on Form 8-A, filed October 5, 2018.
		(iii)	Taylor Devices, Inc. 2025 Stock Option Plan, incorporated by reference to Exhibit 4(i) to the Registrant’s Current Report on Form 8-K, filed October 22, 2025.
	31	Officer certifications.
		(i)	Rule 13a-14(a) Certification of Chief Executive Officer.*
		(ii)	Rule 13a-14(a) Certification of Chief Financial Officer.*
	32	Officer certifications.
		(i)	Section 1350 Certification of Chief Executive Officer.**
		(ii)	Section 1350 Certification of Chief Financial Officer.**
	101	Inline XBRL Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
	101.SCH	Inline XBRL Taxonomy Extension Schema Document
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
	104	Cover Page Interactive Data File – the cover page Inline XBRL tags are embedded within the Inline XBRL document and are contained within Exhibit 101
* Exhibit filed with this report. **Exhibit furnished with this report.

TAYLOR DEVICES, 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.

	TAYLOR DEVICES, INC.
	(Registrant)

Date:	~~December~~March 31, ~~2025~~2026			/s/ Paul Heary
				Paul Heary Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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