UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

F O R M 10-K

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

For the fiscal year ended May 31, 2021

☐ 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)

Registrant's telephone number, including area code (716) 694-0800

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

Title of each class

Trading Symbol

Name of each exchange on which registered

None

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

Common Stock ($.025 par value)

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes ☒ No

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 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 and post 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter on November 30, 2020 is $36,765,000.

The number of shares outstanding of each of the registrant's classes of common stock as of August 27, 2021: 3,496,765.

-2-

Documents	Form 10-K Reference

Proxy Statement	Part III, Items 10-14

PART I			PAGE
	Item 1.	Business.	4
	Item 1A.	Risk Factors.	6
	Item 1B.	Unresolved Staff Comments.	6
	Item 2.	Properties.	6
	Item 3.	Legal Proceedings.	6
	Item 4.	Mine Safety Disclosures.	6
PART II
	Item 5.	Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	7
	Item 6.	Selected Financial Data.	8
	Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	8
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	18
	Item 8.	Financial Statements and Supplementary Data.	18
	Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	18
	Item 9A.	Controls and Procedures.	18
	Item 9B.	Other Information.	18
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance.	18
	Item 11.	Executive Compensation.	18
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	18
	Item 13.	Certain Relationships and Related Transactions, and Director Independence.	18
	Item 14.	Principal Accounting Fees and Services.	18
PART IV
	Item 15	Exhibits and Financial Statement Schedules	19

SIGNATURES			23

	Fiscal 2021				Fiscal 2020
	High		Low		High		Low
First Quarter	$	11.46	$	8.68	$	11.45	$	10.54
Second Quarter	$	10.54	$	8.58	$	11.10	$	10.11
Third Quarter	$	11.93	$	9.76	$	13.39	$	10.10
Fourth Quarter	$	12.43	$	10.58	$	11.57	$	6.61

		Equity Compensation Plan Information
Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders:
2008 Stock Option Plan 2012 Stock Option Plan 2015 Stock Option Plan 2018 Stock Option Plan		19,750 67,000 105,750 75,250	$ 9.61 $11.57 $12.61 $10.73	- - - 84,000
Equity compensation plans not approved by security holders:
2004 Employee Stock Purchase Plan (1)		-	-	218,783
Total		267,750		302,783

(1)	The Company's 2004 Employee Stock Purchase Plan (the "Employee Plan") permits eligible employees to purchase shares of the Company's common stock at fair market value through payroll deductions and without brokers' fees. Such purchases are without any contribution on the part of the Company. As of May 31, 2021, 218,783 shares were available for issuance.

Summary comparison of the years ended May 31, 2021 and 2020
	Increase /
	(Decrease)
Sales, net	$	(5,872,000	)
Cost of goods sold	$	190,000
Selling, general and administrative expenses	$	(407,000	)
Income before provision for income taxes	$	(2,734,000	)
Provision for income taxes	$	(767,000	)
Net income	$	(1,967,000	)

	Year ended May 31						Change
	2021			2020			Amount			Percent
Net Revenue	$	22,510,000		$	28,382,000		$	(5,872,000	)		-21	%
Cost of sales		19,335,000			19,145,000			190,000			1	%
Gross profit	$	3,175,000		$	9,237,000		$	(6,062,000	)		-66	%
… as a percentage of net revenues		14	%		33	%

	2021			2020
Computed tax provision at the expected statutory rate	$	143,000		$	718,000
Tax effect of permanent differences:
Research tax credits		(218,000	)		(272,000	)
Foreign-derived intangible income deduction		—			(100,000	)
U.S. Government PPP loan forgiven		(307,000	)		—
Other permanent differences		42,000			40,000
Other		(41,000	)		—
	$	(381,000	)	$	386,000

	August 2020			April 2021
Risk-free interest rate:		1.750	%		2.625	%
Expected life of the options:		3.9 years			4.0 years
Expected share price volatility:		34	%		32	%
Expected dividends:		zero			zero
These assumptions resulted in estimated fair-market value per stock option:	$	2.88		$	3.49

			Weighted-
	Number of		Average
	Options		Exercise Price
Options outstanding and exercisable at May 31, 2020:		252,250	$	11.52
Options granted:		47,250	$	11.26
Less: Options exercised:		13,000	$	6.34
Less: Options expired:		18,750	$	13.31
Options outstanding and exercisable at May 31, 2021:		267,750	$	11.60
Closing value per share on NASDAQ at May 31, 2021:			$	11.85

	May 31, 2021				May 31, 2020				Increase /(Decrease)
Raw materials	$	503,000			$	658,000			$	(155,000	)	-24	%
Work in process		5,076,000				8,586,000				(3,510,000	)	-41	%
Finished goods		256,000				863,000				(607,000	)	-70	%
Inventory		5,835,000	78	%		10,107,000	92	%		(4,272,000	)	-42	%
Maintenance and other inventory		1,613,000	22	%		879,000	8	%		734,000		84	%
Total	$	7,448,000	100	%	$	10,986,000	100	%	$	(3,538,000	)	-32	%

Inventory turnover		2.1				1.7

	May 31, 2021		May 31, 2020		Increase /(Decrease)
Accounts and other receivables	$	4,121,000	$	5,819,000	$	(1,698,000	)	-29	%
Less: Other receivable		741,000		—		741,000
Accounts receivable		3,380,000		5,819,000		(2,439,000	)	-42	%
CIEB		1,500,000		1,755,000		(255,000	)	-15	%
Less: BIEC		1,362,000		737,000		625,000		85	%
Net	$	3,518,000	$	6,837,000	$	(3,319,000	)	-49	%

Number of an average day’s sales outstanding in accounts receivable (DSO)		42		68

	2021			2020
Number of projects in progress at year-end		14			15
Aggregate percent complete at year-end		32	%		80	%
Average total value of projects in progress at year-end	$	963,000		$	830,000
Percentage of total value invoiced to customer		30	%		74	%

	May 31, 2021		May 31, 2020
Costs	$	2,362,000	$	2,615,000
Estimated earnings		410,000		540,000
Less: Billings to customers		1,272,000		1,400,000
CIEB	$	1,500,000	$	1,755,000
Number of projects in progress		9		10

	May 31, 2021		May 31, 2020
Billings to customers	$	2,741,000	$	7,794,000
Less: Costs		1,011,000		3,781,000
Less: Estimated earnings		368,000		3,276,000
BIEC	$	1,362,000	$	737,000
Number of projects in progress		5		5

DOCUMENTS FILED AS PART OF THIS REPORT:
	Index to Financial Statements:
		(i)		Report of Independent Registered Public Accounting Firm
		(ii)		Consolidated Balance Sheets as of May 31, 2021 and 2020
		(iii)		Consolidated Statements of Income for the years ended May 31, 2021 and 2020
		(iv)		Consolidated Statements of Stockholders' Equity for the years ended May 31, 2021 and 2020
		(v)		Consolidated Statements of Cash Flows for the years ended May 31, 2021 and 2020
		(vi)		Notes to Consolidated Financial Statements - May 31, 2021 and 2020
EXHIBITS:
	3		Articles of incorporation and by-laws
			(i)		Restated Certificate of Incorporation incorporated by reference to Exhibit (3)(i) of Annual Report on Form 10-K, dated August 24, 1983.
			(ii)		Amendment to Certificate of Incorporation incorporated by reference to Exhibit (3)(iv) to Form 8 [Amendment to Application or Report], dated September 24, 1993.
			(iii)		Amendment to Certificate of Incorporation eliminating and re-designating the Series A Junior Preferred Stock and creating 5,000 Series 2008 Junior Participating Preferred Stock, at $.05 par value, as filed by the Secretary of State of the State of New York on September 16, 2008, and incorporated by reference to Exhibit (3)(i) of Form 8-K, dated as of September 15, 2008 and filed September 18, 2008.
			(iv)		Certificate of Change incorporated by reference to Exhibit (3)(i) to Quarterly Report on Form 10-QSB for the period ending November 30, 2002.
			(v)		By-laws and Proxy Review Guidelines incorporated by reference to Exhibit (3) to Quarterly Report on Form 10-Q for the period ending February 28, 2015, filed April 14, 2015.
	4		Instruments defining rights of security holders, including indentures
			(i)		Rights Agreement by and between registrant and Computershare Trust Company, N.A., dated as of September 25, 2018 and letter to shareholders (including Summary of Rights), dated October 5, 2018, attached as Exhibits 4 and 20, respectively, to Registration Statement on Form 8-A 12G, filed with the Securities and Exchange Commission on October 5, 2018.
			(ii)		Description of registrant’s securities incorporated by reference to Exhibit 4(vi) to Annual Report on Form 10-K for the fiscal year ended May 31, 2019, filed August 2, 2019.

10	Material Contracts
	(i)	2005 Taylor Devices, Inc. Stock Option Plan attached as Appendix B to Definitive Proxy Statement, filed with the Securities and Exchange Commission on September 27, 2005.
	(ii)	2008 Taylor Devices, Inc. Stock Option Plan attached as Appendix C to Definitive Proxy Statement, filed with the Securities and Exchange Commission on September 26, 2008.
	(iii)	2012 Taylor Devices, Inc. Stock Option Plan attached as Appendix C to Definitive Proxy Statement, filed with the Securities and Exchange Commission on September 21, 2012.
	(iv)	2015 Taylor Devices, Inc. Stock Option Plan attached as Appendix B to Definitive Proxy Statement, filed with the Securities and Exchange Commission on April 8, 2016.
	(v)	2018 Taylor Devices, Inc. Stock Option Plan attached as Appendix B to Definitive Proxy Statement, filed with the Securities and Exchange Commission on September 27, 2018.
	(vi)	The 2004 Taylor Devices, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8, File No. 333-114085, filed with the Securities and Exchange Commission on March 31, 2004.
	(vii)	Post-Effective Amendment No. 1 to Registration Statement on Form S-8, File No. 333-114085, for the 2004 Taylor Devices, Inc. Employee Stock Purchase Plan, filed with the Securities and Exchange Commission on August 24, 2006.
	(viii)	Form of Indemnification Agreement between registrant and directors and executive officers, attached as Appendix A to Definitive Proxy Statement, filed with the Securities and Exchange Commission on September 27, 2007.
	(ix)	Management Bonus Policy dated as of March 4, 2011 between the Registrant and executive officers, incorporated by reference to Exhibit 10(i) to Quarterly Report on Form 10-Q for the period ending February 28, 2011.
	(x)	Negative Pledge Agreement dated August 30, 2017 by the Registrant in favor of M&T Bank, filed with this report.
	(xi)	Employment Agreement dated as of June 14, 2018 between the Registrant and Alan R. Klembczyk, incorporated by reference to Exhibit 10(i) to Current Report on Form 8-K filed June 19, 2018.
	(xii)	Employment Agreement dated as of June 14, 2018 between the Registrant and Mark V. McDonough, incorporated by reference to Exhibit 10(ii) to Current Report on Form 8-K filed June 19, 2018.
	(xiii)	Employment Agreement dated as of August 9, 2021 between the Registrant and Timothy J. Sopko, incorporated by reference to Exhibit 10 to Current Report on Form 8-K filed August 13, 2021.

11	Statement regarding computation of per share earnings

	REG. 228.601(A)(11) Statement regarding computation of per share earnings

	Weighted average of common stock/equivalents outstanding - fiscal year ended May 31, 2021

			Weighted average common stock outstanding			3,490,213
			Common shares issuable under stock option plans using treasury stock method			1,674
			Weighted average common stock outstanding assuming dilution			3,491,887

			Net income fiscal year ended May 31, 2021	(1)	$ 1,062,895
			Weighted average common stock	(2)	3,490,213
			Basic income per common share (1) divided by (2)		$ 0.30

			Net income fiscal year ended May 31, 2021	(3)	$ 1,062,895
			Weighted average common stock outstanding assuming dilution	(4)	3,491,887
			Diluted income per common share (3) divided by (4)		$ 0.30

	Weighted average of common stock/equivalents outstanding - fiscal year ended May 31, 2020

			Weighted average common stock outstanding			3,481,128
			Common shares issuable under stock option plans using treasury stock method			8,663
			Weighted average common stock outstanding assuming dilution			3,489,791

			Net income fiscal year ended May 31, 2020	(1)	$ 3,029,976
			Weighted average common stock	(2)	3,481,128
			Basic income per common share (1) divided by (2)		$ 0.87

			Net income fiscal year ended May 31, 2020	(3)	$ 3,029,976
			Weighted average common stock outstanding assuming dilution	(4)	3,489,791
			Diluted income per common share (3) divided by (4)		$ 0.87

13	The Annual Report to Security Holders for the fiscal year ended May 31, 2021, attached to this Annual Report on Form 10-K.

21	Subsidiaries of the registrant
	Tayco Realty Corporation is a New York corporation organized on September 8, 1977, owned by the Company.
23	The Consent of Independent Registered Public Accounting Firm precedes the Consolidated Financial Statements.
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	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		XBRL Taxonomy Extension Schema Document
	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB		XBRL Taxonomy Extension Label Linkbase Document
	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

By:	/s/Timothy J. Sopko	Date:	August 27, 2021
	Timothy J. Sopko
	Chief Executive Officer
	(Principal Executive Officer)

By:	/s/Mark V. McDonough	Date:	August 27, 2021
	Mark V. McDonough
	Chief Financial Officer

By:	/s/John Burgess	By:	/s/Robert M. Carey
	John Burgess, Director		Robert M. Carey, Director
	August 27, 2021		August 27, 2021

By:	/s/F. Eric Armenat	By:	/s/Alan R. Klembczyk
	F. Eric Armenat, Director		Alan R. Klembczyk, President and Director
	August 27, 2021		August 27, 2021

TAYLOR DEVICES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

May 31,	2021			2020

Assets
Current assets:
Cash and cash equivalents	$	20,581,604		$	15,159,827
Short-term investments		1,097,012			1,071,950
Accounts and other receivables, net		4,120,564			5,819,471
Inventory		5,835,596			10,107,437
Prepaid expenses		522,747			460,212
Prepaid income taxes		454,778			50,148
Costs and estimated earnings in excess of billings		1,499,604			1,754,573
Total current assets		34,111,905			34,423,618

Maintenance and other inventory, net		1,612,839			879,050
Property and equipment, net		9,816,594			9,407,490
Cash value of life insurance, net		200,538			195,621
Deferred income taxes		190,115			170,115
Total assets	$	45,931,991		$	45,075,894
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings	$	—		$	1,461,500
Accounts payable		1,787,325			1,370,175
Accrued commissions		269,064			305,885
Other accrued expenses		1,715,409			1,663,914
Billings in excess of costs and estimated earnings		1,361,985			736,866
Total current liabilities		5,133,783			5,538,340

Stockholders' Equity:
Common stock, $.025 par value, authorized 8,000,000 shares, issued 4,055,275 and 4,040,805 shares		101,305			100,943
Paid-in capital		10,010,430			9,759,063
Retained earnings		33,601,475			32,538,580
		43,713,210			42,398,586
Treasury stock – 558,834 and 553,934 shares at cost		(2,915,002	)		(2,861,032	)
Total stockholders' equity		40,798,208			39,537,554
	$	45,931,991		$	45,075,894

See notes to consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY

Consolidated Statements of Income

For the years ended May 31,	2021			2020


Sales, net	$	22,509,641		$	28,381,541

Cost of goods sold		19,334,950			19,144,451

Gross profit		3,174,691			9,237,090

Selling, general and administrative expenses		5,526,774			5,934,410

Operating income (loss)		(2,352,083	)		3,302,680

Other income
Interest, net		53,654			111,054
Paycheck Protection Program loan forgiveness		1,461,500			—
Employee Retention Credit		1,510,131			—
Miscellaneous		8,693			2,242
Total other income		3,033,978			113,296

Income before provision for income taxes		681,895			3,415,976

Provision for income taxes (benefit)		(381,000	)		386,000

Net income	$	1,062,895		$	3,029,976

Basic and diluted earnings per common share	$	0.30		$	0.87

See notes to consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY

Consolidated Statements of Shareholders’ Equity

For the years ended May 31,	2021			2020

Common Stock
Beginning of period	$	100,943		$	100,735
Issuance of shares for employee stock purchase plan		37			34
Issuance of shares for employee stock option plan		325			174
End of period		101,305			100,943

Paid-in Capital
Beginning of period		9,759,063			9,538,892
Issuance of shares for employee stock purchase plan		14,954			13,824
Issuance of shares for employee stock option plan		82,070			63,250
Stock options issued for services		154,343			143,097
End of period		10,010,430			9,759,063

Retained Earnings
Beginning of period		32,538,580			29,508,604
Net income		1,062,895			3,029,976
End of period		33,601,475			32,538,580

Treasury Stock
Beginning of period		(2,861,032	)		(2,829,359	)
Issuance of shares for employee stock option plan		(53,970	)		(31,673	)
End of period		(2,915,002	)		(2,861,032	)

Total stockholders' equity	$	40,798,208		$	39,537,554

TAYLOR DEVICES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the years ended May 31,	2021				2020

Operating activities:
Net income	$	1,062,895		$	3,029,976
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation		1,212,713			1,141,110
Stock options issued for services		154,343			143,097
Bad debt expense		134,000			—
Provision for inventory obsolescence		1,500,000			180,000
Deferred income taxes		(20,000	)		19,000
Paycheck Protection Program debt forgiveness		(1,461,500	)		—
Changes in other current assets and liabilities:
Accounts and other receivables		1,564,907			(540,169	)
Inventory		2,038,052			804,721
Prepaid expenses		(62,535	)		(148,052	)
Prepaid income taxes		(404,630	)		186,869
Costs and estimated earnings in excess of billings		254,969			5,817,917
Accounts payable		417,150			(32,517	)
Accrued commissions		(36,821	)		(1,003,473	)
Other accrued expenses		51,495			131,644
Billings in excess of costs and estimated earnings		625,119			103,163
Net operating activities		7,030,157			9,833,286

Investing activities:
Acquisition of property and equipment		(1,621,817	)		(1,231,158	)
Increase in short-term investments		(25,062	)		(16,359	)
Increase in cash value of life insurance		(4,917	)		(4,872	)
Net investing activities		(1,651,796	)		(1,252,389	)

Financing activities:
Short-term borrowings		—			1,461,500
Proceeds from issuance of common stock		43,416			45,608
Net financing activities		43,416			1,507,108

Net change in cash and cash equivalents		5,421,777			10,088,005

Cash and cash equivalents - beginning		15,159,827			5,071,822
Cash and cash equivalents - ending	$	20,581,604		$	15,159,827

See notes to consolidated financial statements.

	2021		2020
Customers	$	3,184,970	$	5,399,915
Customers – retention		200,956		630,823
Gross accounts receivable		3,385,926		6,030,738
Less Allowance for doubtful accounts		6,781		211,267
Add Other receivables		741,419		—
Net accounts receivable	$	4,120,564	$	5,819,471

	2021		2020
Costs incurred on uncompleted contracts	$	3,372,276	$	6,395,550
Estimated earnings		778,011		3,816,527
Total costs and estimated earnings		4,150,287		10,212,077
Less billings to date		4,012,668		9,194,370
Costs and estimated earnings not billed	$	137,619	$	1,017,707

	2021		2020
Land	$	195,220	$	195,220
Buildings and improvements		9,584,087		9,457,142
Machinery and equipment		12,366,569		11,242,667
Office furniture and equipment		2,536,688		2,209,382
Autos and trucks		24,818		24,818
Land improvements		476,429		455,429
Gross property and equipment		25,183,811		23,584,658
Less accumulated depreciation		15,367,217		14,177,168
Property and equipment, net	$	9,816,594	$	9,407,490

	2021		2020
Structural	$	10,137,468	$	15,621,784
Aerospace / Defense		10,183,399		10,771,129
Industrial		2,188,774		1,988,628
Sales, net	$	22,509,641	$	28,381,541

	2021			2020
Current tax provision (benefit):
Federal	$	(361,000	)	$	375,000
State		—			—
Total current tax provision		(361,000	)		375,000
Deferred tax provision (benefit):
Federal		(20,000	)		11,000
State		—			—
Total deferred tax provision		(20,000	)		11,000
Total tax provision	$	(381,000	)	$	386,000

	2021			2020
Deferred tax assets:
Allowance for doubtful receivables	$	1,400		$	44,400
Tax inventory adjustment		22,900			94,000
Allowance for obsolete inventory		440,800			357,100
Accrued vacation		81,400			60,500
Accrued commissions		5,900			3,900
Warranty reserve		23,900			39,400
Stock options issued for services		238,500			230,200
Total deferred tax assets		814,800			829,500
Deferred tax liabilities:
Excess tax depreciation		(624,685	)		(659,385	)
Net deferred tax assets	$	190,115		$	170,115

	2021		2020
Average common shares outstanding		3,490,213		3,481,128
Common shares issuable under stock option plans		1,674		8,663
Average common shares outstanding assuming dilution		3,491,887		3,489,791

	2021			2020
Risk-free interest rate		2.31	%		1.98	%
Expected life in years	4.0			3.9
Expected volatility		33	%		32	%
Expected dividend yield		0	%		0	%

SEC Form 10-K filed by Taylor Devices, Inc.