<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              ---------------------

                                    FORM 10-Q

(Mark One)

  [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001


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

         For the transition period from  ___________________ to ________________




                         Commission File Number 0-13324

                            QUESTRON TECHNOLOGY, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)




                  Delaware                                    23-2257354
--------------------------------------------------------------------------------
       (State or other jurisdiction of                    (I. R. S. Employer
        incorporation or organization)                   Identification Number)

6400 Congress Avenue, Suite 2000, Boca Raton, FL                33487
--------------------------------------------------------------------------------
   (Address of principal executive offices)                  (Zip Code)


                                 (561) 241-5251
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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 past 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 [X]    No [ ]

         As of August 9, 2001, there were 9,206,162 shares of the Registrant's
common stock outstanding.




<PAGE>   2

                           QUESTRON TECHNOLOGY, INC.

                                      INDEX

THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WHICH
INVOLVE CERTAIN RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
MATERIALLY. EACH FORWARD-LOOKING STATEMENT THAT THE COMPANY BELIEVES IS MATERIAL
IS ACCOMPANIED BY A CAUTIONARY STATEMENT OR STATEMENTS IDENTIFYING IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
DESCRIBED IN THE FORWARD-LOOKING STATEMENT. IN THE CONTEXT OF FORWARD-LOOKING
INFORMATION PROVIDED IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OTHER REPORTS,
PLEASE REFER TO THE DISCUSSION OF RISK FACTORS DETAILED IN, AS WELL AS THE OTHER
INFORMATION CONTAINED IN, THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION DURING THE PAST 12 MONTHS.

<TABLE>
<CAPTION>

                                                                                         Page No.
                                                                                         --------

<S>     <C>                                                                               <C>
PART I.  Financial Information

         Item 1. Financial Statements

                          Consolidated Balance Sheet -
                          At June 30, 2001  (unaudited) and December 31, 2000               3

                          Consolidated Statement of Operations  (unaudited) -
                          Three Months and Six Months Ended June 30, 2001 and 2000          4

                          Consolidated Statement of Cash Flows (unaudited) -
                          Six Months Ended June 30, 2001 and 2000                           5

                          Notes to Consolidated Financial Statements                      6 - 8

         Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                   9 - 12

         Item 3.  Quantitative and Qualitative Disclosure About Market Risk                 12

PART II. Other Information                                                                13 - 14

Signature Page                                                                              15


</TABLE>





                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                 JUNE 30, 2001 (unaudited) AND DECEMBER 31, 2000
                             (Dollars in thousands)

<TABLE>
<CAPTION>


                                                                              June 30,       December 31,
                                                                                2001             2000
                                                                             ---------       ------------
<S>                                                                          <C>               <C>
                                     ASSETS
Current assets:
   Cash                                                                      $     732         $     358
   Accounts receivable, less allowances for
      doubtful accounts of $199 in 2001 and $281 in 2000                        24,159            25,560
   Other receivables                                                               248               347
   Inventories                                                                  64,955            60,726
   Other current assets                                                            942             1,356
                                                                             ---------         ---------
      Total current assets                                                      91,036            88,347

Property and equipment - net                                                     5,876             4,562
Cost in excess of net assets of businesses acquired,
   less accumulated amortization of $5,454 in 2001 and $4,522 in 2000           75,298            76,138
Deferred income taxes                                                            4,256             4,342
Other assets                                                                     5,810             5,642
                                                                             ---------         ---------
      Total assets                                                           $ 182,276         $ 179,031
                                                                             =========         =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                          $  10,746         $  16,671
   Accrued expenses                                                              2,368             2,313
   Income taxes payable                                                          1,558             1,780
   Current portion of long-term debt                                            10,069             5,385
                                                                             ---------         ---------
      Total current liabilities                                                 24,741            26,149
Deferred income taxes payable                                                    1,158             1,158
Long-term debt                                                                 105,051           100,749
                                                                             ---------         ---------
      Total liabilities                                                        130,950           128,056
                                                                             ---------         ---------

Commitments and contingencies:
   Common stock subject to put option agreement                                    121               337
    Series C convertible preferred stock                                           750                --
Stockholders' equity:
   Preferred stock, $.01 par value; authorized 10,000,000 shares                    --                --
   Common stock, $.001 par value; authorized 20,000,000
     shares; issued 9,206,162 shares in 2001 and 9,226,013 in 2000                   9                 9
   Additional paid-in capital                                                   56,031            56,031
   Accumulated deficit                                                          (5,585)           (5,402)
                                                                             ---------         ---------
   Total stockholders' equity                                                   50,455            50,638
                                                                             ---------         ---------
   Total liabilities and stockholders' equity                                $ 182,276         $ 179,031
                                                                             =========         =========
</TABLE>


                 See Notes to Consolidated Financial Statements.



                                       3
<PAGE>   4
                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                           THREE MONTHS AND SIX MONTHS
                    ENDED JUNE 30, 2001 AND 2000 (Unaudited)
                      (In thousands, except per share data)


<TABLE>
<CAPTION>
                                                               Three Months Ended                   Six Months Ended
                                                                      June 30,                           June 30,
                                                              ----------------------------     ----------------------------
                                                                 2001             2000              2001             2000
                                                              -----------      -----------     -----------      -----------

<S>                                                           <C>              <C>             <C>              <C>
Sales                                                         $    36,015      $    41,226     $    75,816      $    77,705
Cost of goods sold                                                 23,112           25,417          47,138           47,178
                                                              -----------      -----------     -----------      -----------

Gross Profit                                                       12,903           15,809          28,678           30,527

Selling, general & administrative expenses                          9,454            9,666          19,753           18,744
Depreciation and amortization                                         717              621           1,409            1,242
                                                              -----------      -----------     -----------      -----------

Total operating expenses                                           10,171           10,287          21,162           19,986
                                                              -----------      -----------     -----------      -----------

Operating income                                                    2,732            5,522           7,516           10,541
Interest expense                                                    3,980            2,940           7,838            5,799
                                                              -----------      -----------     -----------      -----------

(Loss) income before income taxes and extraordinary items          (1,248)           2,582            (321)           4,742
(Benefit) provision for income taxes                                 (528)           1,072            (138)           1,968
                                                              -----------      -----------     -----------      -----------

(Loss) income before extraordinary items                             (720)           1,510            (183)           2,774

Extraordinary gain in connection with the early
    extinguishment of debt (less applicable income
    taxes of $326 in 2000)                                             --               --              --              460
                                                              -----------      -----------     -----------      -----------

Net (loss) income                                             $      (720)     $     1,510     $      (183)     $     3,234
                                                              ===========      ===========     ===========      ===========

PER COMMON SHARE:

  (Loss) income before extraordinary items                    $      (.08)     $       .18     $      (.02)     $       .34
  Extraordinary gain                                                   --               --              --              .06
                                                              -----------      -----------     -----------      -----------
  Net (loss) income                                           $      (.08)     $       .18     $      (.02)     $       .40
                                                              ===========      ===========     ===========      ===========

PER DILUTED COMMON SHARE:

  (Loss) income before extraordinary items                    $      (.08)     $       .16     $      (.02)     $       .27
  Extraordinary gain                                                   --               --              --              .05
                                                              -----------      -----------     -----------      -----------
  Net (loss) income                                           $      (.08)     $       .16     $      (.02)     $       .32
                                                              ===========      ===========     ===========      ===========

Average number of common shares outstanding                     9,188,117        8,418,268       9,188,117        8,089,844
                                                              ===========      ===========     ===========      ===========

Average number of diluted common shares outstanding             9,188,117        9,718,250       9,188,117       10,261,125
                                                              ===========      ===========     ===========      ===========

</TABLE>




                 See Notes to Consolidated Financial Statements.






                                       4
<PAGE>   5

                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                       June 30,        June 30,
                                                                         2001           2000
                                                                       -------         -------
<S>                                                                    <C>             <C>
Cash flows from operating activities:
  Net (loss) income                                                    $  (183)        $ 3,234
  Adjustments to reconcile net income to net
    cash used in operating activities:
     Amortization of cost in excess of net assets of businesses
       acquired                                                            932             864
     Depreciation of property and equipment                                463             378
     Amortization of original issue discount                               243              99
     Non-cash interest expense                                           1,083             594
     Deferred income taxes                                                  86             131
     Extraordinary gain in connection with the early
       extinguishment of debt (less applicable income
       taxes of $326)                                                       --            (460)
  Change in assets and liabilities:
     Decrease (increase) in accounts receivable                          1,410          (7,702)
     Decrease (increase) in other receivables                               90            (104)
     Increase in inventories                                            (4,229)         (7,963)
     Decrease (increase) in other current assets                           414            (243)
     (Decrease) increase in accounts payable                            (5,925)          6,669
     Increase (decrease) in accrued expenses                                54            (602)
     (Decrease) increase in income taxes payable                          (223)          1,250
     (Increase) decrease in other assets                                  (255)             86
                                                                       -------         -------

     Net cash used in operating activities                              (6,040)         (3,769)
                                                                       -------         -------

Cash flows from investing activities:
  Net cash consideration paid for acquired business                        (91)           (238)
  Acquisition of property and equipment                                 (1,591)         (1,036)
                                                                       -------         -------
     Net cash used for investing activities                             (1,682)         (1,274)
                                                                       -------         -------

Cash flows from financing activities:
  Proceeds from borrowings under revolving facility                      8,512           4,733
  Proceeds from long-term debt financing                                    --              --
  Repayment of long-term debt                                               (3)           (249)
  Fees and expenses associated with long-term debt financing                --            (233)
  Extraordinary gain (charge) in connection with the early
      extinguishment of debt (less applicable income taxes of
      $326,214 in 2000 and $1,451,516 in 1999)                              --             460
  Proceeds from exercise of options and warrants                            --             520
  Payments on capital leases                                              (153)            (40)
  Payments in respect of exercise of put options                          (216)             --
  Payments on note issued for acquired business                            (43)           (203)
                                                                       -------         -------
     Net cash provided by financing activities                           8,097           4,987
                                                                       -------         -------

Increase in cash and cash equivalents                                      375             (56)
Cash and cash equivalents at beginning of period                           357             111
                                                                       -------         -------

Cash and cash equivalents at end of period                             $   702         $    55
                                                                       =======         =======

</TABLE>


                 See Notes to Consolidated Financial Statements.



                                       5
<PAGE>   6
                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000

NOTE 1.  BASIS OF PRESENTATION.

         The accompanying unaudited consolidated financial statements include
the accounts of Questron Technology, Inc. (the "Company") and its subsidiaries.
The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the Securities and Exchange Commission's instructions for
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.

         Management believes that all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the six month period ended June 30, 2001 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2001. The consolidated balance sheet as of December 31, 2000
reflects the audited balance sheet at that date. For further information, refer
to the financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.

NOTE 2.  EARNINGS PER SHARE.

         The following table sets forth the calculation of net income per common
share and net income per diluted common share (in thousands except share data):

<TABLE>
<CAPTION>

                                                                Three months ended June 30,       Six months ended June 30,
                                                               ----------------------------     ----------------------------
                                                                   2001             2000           2001             2000
                                                               -----------      -----------     -----------      -----------
<S>                                                            <C>              <C>             <C>              <C>
Numerator:
      (Loss) income before extraordinary items                 $      (720)     $     1,510     $      (183)     $     2,774
Denominator:
      Denominator for (loss) income before
         extraordinary items per common share
      Weighted-average shares                                    9,188,117        8,418,268       9,188,117        8,089,844
                                                               -----------      -----------     -----------      -----------
      Effect of dilutive securities:
         Options                                                        --          805,656              --        1,141,735
         Warrants                                                       --          494,326              --        1,029,546
                                                               -----------      -----------     -----------      -----------

      Dilutive potential common shares                                  --        1,299,982              --        2,171,281
                                                               -----------      -----------     -----------      -----------
      Denominator for (loss) income before extraordinary
      items per diluted common share                             9,188,117        9,718,250       9,188,117       10,261,125
                                                               ===========      ===========     ===========      ===========

      (Loss) income before extraordinary items per
         common share                                          $      (.08)     $       .18     $      (.02)     $       .34
                                                               ===========      ===========     ===========      ===========

      (Loss) income before extraordinary items per diluted
         common share                                          $      (.08)     $       .16     $      (.02)     $       .27
                                                               ===========      ===========     ===========      ===========

</TABLE>



                                       6
<PAGE>   7



                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000

NOTE 3. EARLY EXTINGUISHMENT OF DEBT.

         On March 7, 2000, the Company reached agreements with the former
shareholders of Action Threaded Products, Inc. ("Action"), Capital Fasteners,
Inc. ("Capital") and Olympic Fasteners and Electronic Hardware ("Olympic")
whereby notes payable aggregating $5.0 million plus accrued interest were
settled in exchange for 450,000 shares of the Company's common stock. As a
result, the Company realized an extraordinary gain in an amount equal to the
difference between the balance owed and the value of the stock exchanged.

NOTE 4. LOAN AMENDMENTS.

         In connection with amendments to the senior secured credit facility and
the senior subordinated debt facility (the "agreements") obtained in June 2001,
the lenders waived all defaults arising from the failure to satisfy certain
financial covenants at June 30, 2001 and September 30, 2001. In addition, the
amendments deferred certain payments due to the lenders under the original
agreements. The $5.0 million of principal payments due under the senior Term
Note A in $2.5 million installments each on July 1, 2001 and October 1, 2001
have been deferred to December 28, 2001. Quarterly interest payments due to the
senior subordinated lenders of $1.2 million per quarter for the quarter ended
June 30, 2001 and the quarter ending September 30, 2001 have been deferred until
December 31, 2001. Under the agreements, the Company is required to satisfy
certain financial covenants at December 31, 2001 and at each subsequent quarter
end during the year ending December 31, 2002. The Company believes it will be
able to satisfy the financial and other covenants included in the agreements for
the year ending December 31, 2001. However, there can be no assurance that the
Company will be able to remain in compliance with the financial covenants or, in
the event of noncompliance, be able to obtain appropriate amendments or waivers.
In connection with the amendment to the senior subordinated debt facility, the
Company issued 750,000 shares of its Mandatory Redeemable Series C Convertible
Preferred Stock valued at $1.00 per share, or $750,000. This amount will be
amortized over the remaining term of the agreements.

NOTE 5. NEW ACCOUNTING PRONOUNCEMENTS.

         In June 2001, the Finanancial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, BUSINESS COMBINATIONS, and
No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill will no longer
be amortized, but will be subject to annual impairment tests in accordance with
the Statements. Other intangible assets will continue to be amortized over their
useful lives.





                                       7
<PAGE>   8

                    QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000

         The Company will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the nonamortization provisions of the Statement is expected to result in an
increase in net income of $1.1 million ($0.12 per share) per year. During 2002,
the Company will perform the first of the required impairment tests of goodwill
and indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and financial
position of the Company.







                                       8
<PAGE>   9


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS RESULTS OF OPERATIONS

THE THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2001 COMPARED TO THE THREE
MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2000.

         The Company's results of operations through June 30, 2001 include the
operating results of the Company's inventory logistics management business,
Questron Distribution Logistics, Inc. ("QDL"), its master distribution of
fasteners business, Integrated Material Systems, Inc. ("IMS") and its battery
distribution business, Power Components, Inc. ("PCI").

         The Company's revenues for the three month and six month periods ended
June 30, 2001 amounted to $36.0 million and $75.8 million, respectively,
compared with $41.2 million and $77.7 million for the comparable prior year
periods. This decline in revenues is attributable to current economic conditions
and the continued weakness in the Company's mature inventory logistics
management ("ILM") programs. The effect of this weakness, however, has been
offset in part by the continued maturation of the Company's recently signed ILM
contracts. The Company continued to enter into new ILM programs with large OEMs
in the second quarter of 2001. The implementation of such newly signed programs,
together with the continued implementation of ILM programs entered into in 2000
and modest economic improvement in the second half of 2001, are expected to have
a positive impact on the Company's results for 2001.

         The Company's operating income was $2.7 million and $7.5 million,
respectively for the three month and six month periods ended June 30, 2001,
compared with operating income of $5.5 million and $10.5 million for the
comparable prior year periods. The decline in operating income is due to the
increased expense levels to support the recently signed ILM programs at their
expected sales levels. While these programs continue to grow, not all have
reached their expected sales levels. The Company continues to address staffing
levels, consolidate facilities where possible and eliminate all discretionary
spending. In addition, the Company has completed all systems integrations and
all branch operations are on-line. The Company continues to make progress
towards installing its new software tools designed to more accurately predict
customer demand and to help the Company more efficiently manage its inventory
levels.

         Interest expense for the three month and six month periods ended June
30, 2001 amounted to $4.0 million and $7.8 million, respectively. For the
comparable periods of the prior year, the Company's results include interest
expense of $2.9 million and $5.8 million, respectively. The increase in interest
expense reflects the cost of incremental borrowings associated with QDL's
working capital needs, as well as the effect of the higher cost of the $17.5
million Senior Subordinated Debt incurred in November 2000.

         The provision for income taxes for the three month and six month
periods ended June 30, 2001 reflects an effective income tax rate of 42.3% and
43.0%, respectively, compared with 41.5% for the comparable prior year periods.





                                       9
<PAGE>   10

         Net loss for the three month and six month periods ended June 30, 2001
was $720 thousand and $183 thousand, compared with income before extraordinary
gain of $1.5 million and $2.8 million for the comparable prior year periods.
During the first quarter of 2000, the Company entered into an agreement with the
former shareholders of Action, Capital and Olympic repaying $5 million of
acquisition indebtedness, plus accrued interest, with 450,000 shares of the
Company's common stock, valued at $4.5 million. As a result, the Company
recognized an extraordinary gain of $460 thousand net of applicable income
taxes, for the difference between the balance owed and the value of the stock
exchanged. After the extraordinary gain, the net income for the three month and
six month periods ended June 30, 2000 amounted to $1.5 million and $3.2 million,
respectively. The decline in net income for the three month and six month
periods ended June 30, 2001 as compared with income before extraordinary gain
for the comparable prior year periods is due to increased operating expenses to
support the anticipated higher levels of sales from recently signed ILM
programs, which have not reached expected sales levels as of June 30, 2001, as
well as increased interest expense.

LIQUIDITY AND CAPITAL RESOURCES

         As of June 30, 2001, the Company had $732 thousand in cash, compared to
$358 thousand as of December 31, 2000. As of June 30, 2001, the Company had
working capital of $66.3 million, compared with working capital of $62.2 million
as of December 31, 2000.

         For the six months ended June 30, 2001, the net cash used in the
Company's operating activities amounted to $6.0 million, principally reflecting
an increase in inventories and a decrease in accounts payable, offset in part by
a decrease in accounts receivable.

         For the six months ended June 30, 2001, the net cash used in the
Company's investing activities amounted to $1.7 million, including $91 thousand
of additional net cash consideration paid for RSD Sales Company, Inc. and $1.6
million of capital expenditures for the acquisition of fixed assets, principally
for the initial payments on the $2.5 million capital expenditure associated with
the implementation of additional supply chain management software tools. Other
than the remaining $1.7 million associated with these software tools, the
Company does not have significant commitments for capital expenditures as of
June 30, 2001 and no significant commitments are anticipated for the remainder
of 2001.

         For the six months ended June 30, 2001, the net cash provided by the
Company's financing activities amounted to $8.1 million, consisting principally
of $8.5 million of bank borrowings under the Company's revolving credit
facility.

         In connection with amendments to the senior secured credit facility and
the senior subordinated debt facility (the "Amendments") obtained as of June 30,
2001, the lenders waived all defaults arising from the failure to satisfy
certain financial covenants at June 30, 2001 and September 30, 2001. In
addition, the Amendments deferred certain payments due to the lenders under the
senior secured credit facility and the senior subordinated debt facility. The
$5.0 million of principal payments due under the senior credit facility in $2.5
million installments each on July 1, 2001 and October 1, 2001 have been deferred
to December 28, 2001. Quarterly interest payments due to the senior




                                       10
<PAGE>   11

subordinated lenders of $1.2 million per quarter for the quarter ended June 30,
2001 and the quarter ending September 30, 2001 have been deferred until December
31, 2001.

         The amendment to the senior subordinated debt facility provides that if
Net Transaction Proceeds from a Transaction sufficient to provide for the
Retirement have not been received and applied, on or before December 31, 2001,
to the Retirement, then the Company shall pay to each holder of the senior
subordinated notes on January 2, 2002 a fee equal to three percent (3%) of the
aggregate principal amount of the notes held by such holder on December 31,
2001.

         For the purposes of this provision, "Retirement" means the full and
final payment in full in cash, and retirement, of: (a) all obligations on the
senior secured credit facility, and any and all expenses or disbursements
related thereto or any other obligations owing to the holders thereof; (b) the
principal, interest, premium, if any, and any other obligations whatsoever to
the holders of any other senior debt; and (c) all the obligations on the senior
subordinated debt facility, and any and all expenses or disbursements related
thereto or any other obligations owing to the holders thereof. In addition,
"Transaction" means any sale of the Company or a subsidiary (whether structured
in the form of a sale of stock held by the existing holders of the Common Stock,
a sale of all or substantially all of the property of the Company or a
subsidiary or a merger or consolidation of any of the Company or a subsidiary
with any other person), any recapitalization or refinancing or any other
transaction which, if consummated, would result in Net Transaction Proceeds
becoming available to fully consummate the Retirement on or prior to December
31, 2001.

         Under the Amendments, the Company is required to satisfy certain
financial covenants at December 31, 2001 and at each subsequent quarter end
during the year ending December 31, 2002. The Company believes it will be able
to satisfy the financial and other covenants included in the senior secured
credit facility and the senior subordinated debt facility, as amended, for the
year ending December 31, 2001. However, there can be no assurance that the
Company will be able to remain in compliance with the financial covenants or, in
the event of noncompliance, be able to obtain appropriate amendments or waivers.

         In connection with the amendment to the senior subordinated debt
facility, the Company issued 750,000 shares of its Mandatory Redeemable Series C
Convertible Preferred Stock valued at $1.00 per share, or $750,000. This amount
will be amortized over the remaining term of the agreement. Promptly following
the closing of a Transaction (as that term is defined in the Amendment with
respect to the Company's 14.5% Senior Subordinated Notes) resulting in the
Retirement (as such term is defined in such Amendment), the Company shall, to
the extent it may lawfully do so, redeem all, but not part, of the then
outstanding Series C Preferred Stock by paying in cash therefor $1.00 per share.
See Part II, Item 2, "Changes in Securities and Use of Proceeds" for a
description of the terms of the Series C Convertible Preferred Stock.





                                       11
<PAGE>   12

         The Company intends to continue to identify and evaluate potential
merger and acquisition candidates engaged in businesses complementary to its
business. While certain of such additional potential acquisition opportunities
are at various stages of consideration and evaluation, none is at any definitive
stage at this time.

         The Company believes that its working capital, funds available under
its senior secured credit facility, and funds generated from operations will be
sufficient to meet its obligations through 2001, including the amounts due under
the senior secured credit facility and the senior subordinated debt facility due
on December 31, 2001, but excluding cash requirements associated with any
business acquisitions. However, there can be no assurance that the Company will
be able to make all of the payments due under the senior secured credit facility
and the senior subordinated debt facility on December 31, 2001 or, if it is
unable to do so, be able to obtain appropriate amendments or waivers.

         The Company continues to work with Credit Suisse First Boston exploring
strategic alternatives that the Company hopes will aid the Company in realizing
its potential for growth and in maximizing value for its stockholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's interest expense is sensitive to changes in the general
level of U.S. interest rates. In this regard, changes in the U.S. rates may
effect the interest paid on a portion of its debt. The Company does not enter
into derivative financial instruments.




                                       12
<PAGE>   13

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Not applicable.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         In connection with amendments to the senior secured credit facility
obtained as of June 30, 2001, the Company issued 750,000 shares of its Mandatory
Redeemable Series C Convertible Preferred Stock ("Series C Preferred Stock"),
with a liquidation value of $1.00 per share (the "Series C Liquidation Amount"),
to the lenders under the senior secured credit facility.

         Promptly following the closing of a Transaction (as that term is
defined in the Amendment with respect to the Company's 14.5% Senior Subordinated
Notes) resulting in the Retirement (as such term is defined in such Amendment),
the Company shall, to the extent it may lawfully do so, redeem all, but not
part, of the then outstanding Series C Preferred Stock by paying in cash
therefore $1.00 per share plus any dividends declared and payable to the Series
C Preferred Stock but not yet paid.

         Beginning on July 1, 2002, each share of the Series C Preferred Stock
shall be convertible into that number of shares of Common Stock equal to the
Series C Liquidation Amount divided by the average of the closing price per
share of Common Stock as reported by the Nasdaq National Market (or if
transactions in the Common Stock are not then reported by the Nasdaq National
Market, as reported by such exchange or automatic quotation system then
reporting transactions in such shares) for the 30 trading days immediately
preceding the date of delivery of the notice of conversion. The conversion rate
is subject to customary anti-dilution provisions. In lieu of completing any such
conversion, the Company may instead redeem Series C Preferred Stock submitted
for conversion by paying the Series C Liquidation Amount in cash with respect to
such Series C Preferred Stock. Any such redemption, however, would be subject to
the provisions of the Company's debt obligations restricting the redemption of
the Company's capital stock.

         The holders of the Series C Preferred Stock shall have no right to vote
on matters submitted to the stockholders except that the Company shall not,
without the affirmative vote or consent of the holders of shares representing at
least a majority of the shares of Series C Preferred Stock then outstanding,
acting as a separate class: (i) in any manner authorize or create any class of
capital stock ranking, either as to payment of dividends, distribution of assets
or redemption, prior to or on a parity with the Series C Preferred Stock; or
(ii) in any manner alter or change the designations, powers, preferences or
rights or the qualifications, limitations or restrictions of the Series C
Preferred Stock.

         The issuance of the Series C Preferred Stock was exempt from
registration under the Securities Act of 1933, as amended, as an issuance not
involving any public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.



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<PAGE>   14

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            At the Company's annual meeting of the stockholders held on June 14,
2001, the following directors were elected to the Board of Directors:

Name                              Affirmative Votes            Negative Votes
----                              -----------------            --------------

Dominic A. Polimeni               6,257,891 (97.7%)           148,751 (2.3%)
Robert V. Gubitosi                6,252,891 (97.6%)           153,751 (2.4%)
Douglas D. Zadow                  6,257,891 (97.7%)           148,751 (2.3%)
Milton M. Adler                   6,257,891 (97.7%)           148,751 (2.3%)
William J. Coscioni               6,257,891 (97.7%)           148,751 (2.3%)
Paul A. Leonard                   6,257,891 (97.7%)           148,751 (2.3%)
William J. McSherry, Jr.          6,257,891 (97.7%)           148,751 (2.3%)

            In addition, the stockholders approved a resolution ratifying the
selection of Ernst & Young LLP as the Company's Independent Public Accountants
for the fiscal year 2001 with 6,377,767 votes in favor (representing 99.6% of
voting shares), 21,514 votes opposed (representing 0.3% of voting shares) and
7,361 votes abstained (0.1% of voting shares).

ITEM 5. OTHER INFORMATION

        Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

             a) Exhibits:

         1.  Certificate of Designation for Series C Preferred Stock

         2.  Waiver and Amendment to Amended and Restated Loan and Security
             Agreement dated as of June 30, 2001

         3.  Second Combined Amendment Agreement dated as of June 30, 2001


             b) Reports on Form 8-K:

                None.



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<PAGE>   15


                                   SIGNATURES

         Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                     QUESTRON TECHNOLOGY, INC.


                                     (1)  Principal Executive Officer:

Date:  August 14, 2001                    /s/ Dominic A. Polimeni
                                          -----------------------------------
                                          Dominic A. Polimeni
                                          Chairman and Chief Executive Officer



                                     (2)  Principal Financial and Accounting
                                             Officer:

Date: August 14, 2001                     /s/ Robert V. Gubitosi
                                          -----------------------------------
                                          Robert V. Gubitosi
                                          President and Chief Financial Officer





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