UNITED STATES
                        SECURITIES AND EXCHANGE COMMISION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)
   [ X ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended     December 31, 2000
                                                 ----------------------------

   [   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT
         For the transition period from                  to
                                        ------------------------------------

                         Commission file number 1-14072

                             PEN INTERCONNECT, INC.
        (Exact name of small business issuer as specified in its charter)

            UTAH                            87-0430260
(State or other jurisdiction of         (I.R.S. Employer Identification No)
incorporation or organization)

                   2961 W. MacArthur Blvd. Santa Ana, CA 92704
                  --------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

                                 (714) 436 9724
                           (Issuer's telephone number)

                                       N/A

(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act 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
                                                            ---  -

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court.

                                     Yes No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         As of December 31, 2000 the issuer had 31,016,966  shares of its common
stock, par value $0.01 per share, issued and outstanding.
         Transitional Small Business Disclosure Format (check one):

                                                         Yes No X
                                                            -  ---


                                        1


<PAGE>


                                   FORM 10-QSB

                             PEN INTERCONNECT, INC.

                                Table of Contents


PART I - FINANCIAL INFORMATION

Item 1   Financial Statements

                  Financial Information                                        3

                  Balance Sheets at December 31, 2000
                  (unaudited) and September 30, 2000                         4-5

                  Statements of Operations  for the three months
                  ended December 31, 2000 and 1999 (unaudited)                 6

                  Statements of Cash Flows for the three months
                  ended December 31, 2000 and 1999 (unaudited)               7-8

                  Notes to Condensed Financial Statements (unaudited)       9-12

Item 2            Management's Discussion and Analysis or
                  Plan of Operation                                        13-15

PART II - OTHER INFORMATION

Item 1            Legal Proceedings                                           16

Item 2            Changes in the Securities and Use of Proceeds               16

Item 3            Defaults Upon Senior Securities                             17

Item 4            Submission of Matters to a Vote of Security Holders         18

Item 5            Other Information                                           18

Item 6(a).        Exhibits                                                    18

Item 6(b).        Reports on Form 8-K                                         18

Signatures                                                                    18

                                       2
<PAGE>

                             PEN INTERCONNECT, INC.

                                     PART I

                              FINANCIAL INFORMATION

                 ITEM 1. INTERIM CONDENSED FINANCIAL STATEMENTS


     Pen  Interconnect,   Inc.  (the  "Company"),  has  included  the  unaudited
     condensed  balance sheet of the Company as of December 31, 2000 and audited
     balance  sheet as of September 30, 2000 (the  Company's  most recent fiscal
     year),  unaudited  condensed  statements of operations for the three months
     ended  December 31, 2000 and 1999,  and unaudited  condensed  statements of
     cash flows for the three months ended December 31, 2000 and 1999,  together
     with unaudited condensed notes thereto. In the opinion of management of the
     Company, the financial statements reflect all adjustments, all of which are
     normal recurring  adjustments,  considered  necessary to fairly present the
     financial  condition,  results of operations  and cash flows of the Company
     for the interim periods  presented.  The financial  statements  included in
     this report on Form 10-QSB should be read in  conjunction  with the audited
     financial  statements of the Company and the notes thereto  included in the
     annual  report of the Company on Form  10-KSB for the year ended  September
     30, 2000. The results of operations for the three months ended December 31,
     2000 may not be indicative of the results that may be expected for the year
     ending September 30, 2001.


                                       3
<PAGE>


                             Pen Interconnect, Inc.
                                 BALANCE SHEETS
                                     ASSETS

<TABLE>
<CAPTION>
                                                                                   December 31,       September 30,
                                                                                       2000               2000
                                                                                 ----------------   ------------------
                                                                                   (unaudited)
CURRENT ASSETS
<S>                                                                                      <C>                  <C>
      Cash and cash equivalents                                                          $ 6,244              $ 9,319
      Other receivables                                                                   37,020                    0
       Assets from discontinued operations                                                     0                9,605
                                                                                 ----------------   ------------------

                 Total current assets                                                     43,264               18,924


PROPERTY AND EQUIPMENT, AT COST
      Computer equipment                                                                   1,028                1,028

      Less accumulated depreciation                                                        (180)                (154)
                                                                                 ----------------   ------------------

           Total property and equipment                                                      848                  874
                                                                                 ----------------   ------------------

      Total Assets                                                                       $44,112              $19,798
                                                                                 ================   ==================
</TABLE>


The accompanying notes are an integral part of these statements.
                                       4


<PAGE>


                             Pen Interconnect, Inc.

                           BALANCE SHEETS - CONTINUED

                      LIABILITIES AND STOCKHOLDERS' DEFICIT


<TABLE>
<CAPTION>
                                                                                   December 31,       September 30,
                                                                                       2000               2000
                                                                                 ----------------   ------------------
                                                                                   (unaudited)
CURRENT LIABILITIES
<S>                                                                                    <C>                  <C>
      Accounts payable                                                                 $ 248,689            $ 200,752
      Accrued liabilities                                                                768,513              724,647
      Convertible debentures                                                             150,000              150,000
      Notes payable                                                                      131,648               56,648
      Liabilities from discontinued operations                                           865,258              864,791
                                                                                 ----------------   ------------------

                 Total current liabilities                                             2,164,108            1,996,838

STOCKHOLDERS' DEFICIT
      Convertible Preferred stock, $0.01 par value
           authorized 5,000,000 shares,  Series A; issued
           and outstanding 121 shares at December 31, 2000
           and 130 shares at September 30, 2000.                                              1                  1
           Series B; issued and outstanding 926 shares at December 31,
           2000 and September 30, 2000                                                        9                  9
      Common stock, $0.01 par value,
           authorized  50,000,000 shares,  issued and
           outstanding 31,016,966 shares at December 31,
           2000 and 27,696,946 shares at September 30, 2000                              310,170              275,969
      Additional paid-in capital                                                      19,399,234           19,282,402
      Accumulated deficit                                                           (21,829,410)         (21,535,421)
                                                                                 ----------------   ------------------

                 Total stockholders' deficit                                         (2,119,996)          (1,977,040)
                                                                                 ----------------   ------------------

                                                                                         $44,112              $19,798
                                                                                 ================   ==================
</TABLE>

The accompanying notes are an integral part of these statements.
                                       5

<PAGE>


                             Pen Interconnect, Inc.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                            Three months ended
                                                                                                December 31,
                                                                                           2000               1999
                                                                                           ----               ----
<S>                                                                                   <C>                <C>
Net sales                                                                             $             0    $           0
Cost of sales
                                                                                             0                 0
                                                                                      ----------------   ---------------
      Gross profit                                                                                                    0
                                                                                             0

Operating expenses
      General and administrative                                                              202,778           206,134
      Depreciation and amortization                                                                26                26
                                                                                      ----------------   ---------------

             Total operating expenses                                                         202,804           206,160

      Other income (expense)
      Loss on impairment                                                                     (63,000)                 0
                                                                                      ----------------   ---------------
      Loss from continuing operations                                                       (265,804)         (206,160)

      Loss from discontinued operations                                                      (39,323)         (324,069)
                                                                                      ----------------   ---------------

      Net loss before extraordinary item                                                    (305,127)         (530,227)

      Extinguishment of debt                                                                 (11,119)                 0
                                                                                                    -
                                                                                      ----------------   ---------------

      Net loss                                                                              (294,008)        $(530,227)
                                                                                            =========        ==========

Loss per common share
   Loss before discontinued items & extraordinary item: basic and diluted                    $                $  (0.02)
                                                                                          (0.01)
   Loss from discontinued operations: basic and diluted                                             -            (0.03)
   Loss before extraordinary item: basic and diluted                                           (0.01)                 -
   Extinguishment of debt: basic and diluted                                                        -                 -
   Net loss per share: basic and diluted                                                       (0.01)            (0.05)

    Weighted average common shares outstanding - basic and diluted                         29,075,237         9,668,670

</TABLE>

 The accompanying notes are an integral part of these statements.
                                       6

<PAGE>


                             Pen Interconnect, Inc.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                          Three months ended
                                                                                             December 31,
                                                                                   ---------------------------------
                                                                                        2000              1999
                                                                                   ---------------   ---------------

Increase (decrease) in cash and cash equivalents
    Cash flows from operating activities
<S>                                                                                      <C>          <C>
        Net loss                                                                   $     (294,008)    $    (530,227)
        Adjustments to reconcile net loss to net cash
           used in operating activities
            Depreciation and amortization                                                      26            54,455
            Allowance for notes receivable                                                 63,000
            Warrant/option compensation expense                                             42513            45,650
            Changes in asset and liabilities
                 Trade accounts receivable                                                      0          (330,855)
                 Inventories                                                                    0            49,713
                 Prepaid expenses and other assets                                          9,605           116,399
                 Accounts payable                                                          48,404           958,733
                 Accrued liabilities                                                       43,866             9,518

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

                       Total adjustments                                                  207,414           903,613
                                                                                   ---------------   ---------------

                   Net cash used in operating activities                                  (86,594)          373,386
                                                                                   ---------------   ---------------

    Cash flows from investing activities
        Purchase of property and equipment                                                      0            (2,173)
        Issuance of notes receivable                                                      (37,020)          (10,475)
        Advances to perFORMplace                                                          (63,000)                0
                                                                                   ---------------   ---------------

                   Net cash used in investing activities                                 (100,020)          (12,648)
                                                                                   ---------------   ---------------

</TABLE>

                                   (Continued)
                                       7
<PAGE>


                             Pen Interconnect, Inc.

                      STATEMENTS OF CASH FLOWS - CONTINUED
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                          Three months ended
                                                                                             December 31,
                                                                                   ---------------------------------
                                                                                        2000              1999
                                                                                   ---------------   ---------------
    Cash flows from financing activities
<S>                                                                                             <C>         <C>
        Principal payments on long-term obligations                                             0           (67,327)
        Net change in line of credit                                                            0          (296,402)
        Accrued dividends on preferred shares                                             (42,231)         (112,000)
        Proceeds from issuance of notes payable                                            75,000                 0
        Principal payments on capital lease obligations                                         0           (42,663)
        Proceeds from sale of common stock                                                113,750            36,851
        Exercise of warrants and options                                                   37,020
                                                                                   ---------------   ---------------

                  Net cash provided by financing activities                               183,539          (435,893)
                                                                                   ---------------   ---------------

Net decrease in cash and cash equivalents                                                  (3,075)         (120,805)

Cash and cash equivalents at beginning of period                                            9,319           177,214
                                                                                   ---------------   ---------------

Cash and cash equivalents at end of period                                            $     6,244        $   56,409
                                                                                   ===============   ===============

Supplemental  disclosures of cash flow  information  Cash paid during the period
for:
   Interest                                                                        $            0      $    176,211
   Income taxes                                                                    $            0    $            0

</TABLE>

The accompanying notes are an integral part of these statements.

Non-cash investing and financing activities

During the first quarter of FY2001 Series A preferred  shareholders  converted 9
preferred  shares into 450,000 common shares at an average  conversion  price of
$0.02 per common share. Under the conversion terms of the convertible  preferred
shares, a holder has the right to convert preferred shares into common shares at
eighty-five  (85%)  percent of the average of the two lowest  closing bid prices
during the last twenty-two (22) consecutive trading days prior to conversion.

                                       8

<PAGE>


During the first three months of FY 2001,  the Company has issued 300,000 common
shares to consultants who performed  various services for the Company in lieu of
cash payments.  The Company  recognized  $14,833 as warrant/option  compensation
expense.  Additionally, the Company issued 70,000 common shares in settlement of
a  lawsuit  with a  former  officer  and  recognized  $9,842  as  warrant/option
compensation  expense.  Also during the quarter,  the Company re-priced exercise
price for certain options on 267,000 common shares from $0.65 to $0.06 per share
and recognized $17,355 as warrant/option compensation expense.

During  the  quarter  debt and trade  payables  in the  amount of  $11,602  were
converted  into  3,867  common  shares  and  recognized   gains  of  $11,119  as
extinguishments of debt.

NOTE A - GOING CONCERN

       The accompanying  financial  statements have been prepared  assuming that
       the  Company  will  continue  as a going  concern.  The  Company  has had
       recurring  losses,  $294,008 for the quarter  ended  December 31, 2000, a
       deficit  of  $2,199,996  in  stockholders'  equity and  negative  working
       capital of $2,120,844 for the period ended December 31, 2000. The Company
       has  entered  into a purchase  agreement  to acquire two  divisions  from
       Imaging  Technologies  Corporation  ("ITEC"  /OTC  BB)  in  exchange  for
       seventy-five percent of the outstanding common shares of the Company. The
       Company  intends to raise  additional  funds in the  capital  markets for
       working  capital  purpose upon  completion  of the  acquisitions.  If the
       Company does not complete the acquisition, the Company will have to raise
       additional  capital to fund its negative cash flow. These factors,  among
       others,  raise  substantial doubt about the Company's ability to continue
       as a going concern.

NOTE B - ACQUISITIONS/DISPOSITIONS

       PowerStream Division

       On December  28, 1999 the Company  signed a letter of intent with Mark W.
       Lund of Lund Instrument  Engineering,  Inc. ("Lund") of Orem, UT. to sell
       certain assets and to assume certain liabilities of PowerStream Division.
       The transaction closed on January 21st, 2000. Lund remitted $74,324.00 to
       the  Company  and  received  assets  with a book  value of  approximately
       $239,350,  customer  contracts  and  general  intangibles;   and  assumed
       liabilities and customer advances of approximately  $411,000. The Company
       is to receive for three years royalties of a) sixteen (16) percent of the
       gross  profits  generated  from sales  generated  from a contract with L3
       Communications,  less any  customer  advances and b) eight (8) percent of
       gross  profits on all other  sales  contracts  in place at  closing.  The
       royalty agreement has been seized by the Company's secured lender as part
       of the lender's foreclosure in March 2000.


                                       9

<PAGE>


NOTE C - OPTIONS TO PURCHASE COMMON STOCK

       Options representing 267,000 common shares were exercised in October 2000
       at a price of $0.06 per share.  The option shares were originally  priced
       at $.65  per  share.  Proceeds  ($16,020)  were  utilized  for  corporate
       operations.

NOTE D - WARRANTS TO PURCHASE COMMON STOCK

       Warrants  representing  2,329,201 common shares were exercised during the
       quarter  at a  weighted  average  price  of  $0.06  per  share.  Proceeds
       ($134,758) were utilized for corporate operations and debt reduction.

NOTE E - OPTIONS/WARRANTS TO PURCHASE COMMON STOCK

       During the first three months of FY 2001 the Company  issued  warrants to
       purchase  3,714,201  shares of the Company's  common stock.  All warrants
       were issued at an exercise price,  which was equal to or above the market
       price at the time of issuance.  The following table outlines the features
       of these warrants:

         Number of             Exercise            Expiration
          Warrants              Price                 Date
       ----------------     -------------      -------------------
           3,714,201             $0.04               November 2003


NOTE F - ACCRUED PREFERRED STOCK DIVIDENDS

       The  Company   accrued   $42,231  for  dividends   payable  to  preferred
       shareholders during the quarter.

Note G - Preferred Stock

        The  Company  has  issued two series of  Preferred  Stock.  Series A was
        issued in February 1999 consisting of 1,800 shares,  par value $0.01 per
        share,  for $1,000  per share.  Series B was issued in April 1999 at the
        same price and par value but only 1,000 shares were issued.  Both series
        of  Preferred  Stock  carry a 16  percent  dividend  rate  which is paid
        quarterly. If and when the Company's stock is listed again on NASDAQ the
        dividend rate will drop to 8 percent.

                                       10

<PAGE>


         Both issuances of Preferred  Stock are  convertible  into shares of the
         Company's  Common  Stock.  Each  share of Series A  Preferred  Stock is
         convertible  into an  amount of shares  of Pen  Common  Stock  equal to
         $1,000  divided by the average of the two lowest closing bid prices for
         Pen  Common  Stock  during the period of 22  consecutive  trading  days
         ending with the last trading day before the date of  conversion,  after
         discounting that market price by 15 percent (the  "Conversion  Price").
         The maximum  Conversion Price for the Series A Preferred Stock is $1.17
         per share.  The shares of Series B Preferred Stock are convertible into
         Common  Stock at the same  Conversion  Price as the Series A  Preferred
         Stock  except  for a  maximum  Conversion  Price  of $0.79  per  share.
         Warrants to acquire  320,000  shares of Common Stock at prices  ranging
         from $0.86 to $1.28 per share were also issued to the purchasers of the
         Series A and Series B Preferred  Stock. The Warrants expire three years
         from date the Preferred Stock and warrants were initially issued.

NOTE H - CONVERTIBLE DEBENTURE

         In August  2000,  the  Company  entered  into a  convertible  debenture
         agreement  for  $600,000  in  exchange  for  4,000,000  shares  of  the
         Company's common stock. This agreement consists of three  installments:
         $150,000 upon the signing of the agreement; $150,000 upon the submittal
         of the registration documents;  and $300,000 upon the completion of the
         registration of the debenture. The first installment was received prior
         to September 30, 2000. The  convertible  debenture has an interest rate
         of 7% per annum.  The  Company is  currently  preparing  the  necessary
         documents to register the debenture.  The debenture is convertible into
         common  stock at the  lesser of $0.15  per  share or 70% of the  market
         price on the conversion date.

NOTE I - CONVERIBLE PROMISSORY NOTE

         In October 2000 the Company  issued a  convertible  promissory  note to
         Imaging  Technologies,  Inc.  (ITEC) for $75,000 at an interest rate of
         ten (10)  percent per annum.  ITEC has the right to convert the note to
         unregistered  common stock of the company at a conversion rate of $0.10
         per share.  Upon  conversion,  the Company is required to register  the
         shares  in the next  appropriate  registration  statement  filed by the
         Company.

         The  note  was due  December  9,  2000.  As the  Company  has  signed a
         definitive  agreement  with ITEC to acquire two divisions of ITEC,  the
         lender has agreed to extend the term of the note pending the closing of
         the acquisition.

                                       11

<PAGE>


Note J - Earnings (loss) per share

         Basic  earnings  (loss) per common  share is computed  by dividing  net
         earnings  (loss)  available  to  common  shareholders  by the  weighted
         average number of common shares outstanding during each period. Diluted
         earnings (loss) per common share are similarly calculated,  except that
         the  weighted  average  number of common  shares  outstanding  includes
         common  shares  that may be issued  subject  to  existing  rights  with
         dilutive  potential except for periods when such calculations  would be
         anti-dilutive.

         For the three ended December 31, 2000, net earnings (loss) attributable
         to  common  shareholders  includes  accrued  dividends  at  the  stated
         dividend rate from date of issuance and a non-cash  imputed dividend to
         the preferred shareholders related to the beneficial conversion feature
         on the 1999 Series A and B Preferred  Stock and related  warrants.  The
         beneficial conversion feature is computed as the difference between the
         market  value  of the  common  stock  into  which  the  Series  A and B
         Preferred Stock can be converted and the value assigned to the Series A
         and B Preferred Stock in the private placement. The imputed dividend is
         a one-time  non-cash  charge  against  the  earnings  (loss) per common
         share.  The  calculation  of  earnings  (loss) per share is included in
         Exhibit 11.



                                       12

<PAGE>


ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


FORWARD-LOOKING   STATEMENTS.   This  report  contains  certain  forward-looking
statements  within the meaning of section 27A of the  Securities  Act of 1933 as
amended,  and section 21E of the  Securities  Exchange Act of 1934,  as amended,
that involve risks and uncertainties.  In addition, the Company may from time to
time make oral forward-looking statements.  Actual results are uncertain and may
be  impacted  by  the  following  factors.  In  particular,  certain  risks  and
uncertainties  that may impact the  accuracy of the  forward-looking  statements
with  respect to  revenues,  expenses  and  operating  results  include  without
limitation,   cycles  of  customer  orders,  general  economic  and  competitive
conditions and changing consumer trends,  technological  advances and the number
and timing of new product  introductions,  shipments of products and  components
from foreign suppliers, and changes in the mix of products ordered by customers.
As a result,  the actual results may differ  materially  from those projected in
the forward-looking statements.

Because  of these and other  factors  that may affect  the  Company's  operating
results,  past  financial  performance  should not be considered an indicator of
future performance, and investors should not use historical trends to anticipate
results or trends in future periods.

The following  discussion and analysis  provides certain  information  which the
Company's  management believes is relevant to an assessment and understanding of
the Company's results of operations and financial condition for the three months
ended December 31, 2000 and 1999. This discussion  should be read in conjunction
with the audited financial  statements of the Company and notes thereto included
in the Annual Report of the Company on Form 10-KSB for the year ended  September
30, 2000.

General

There were no sales from  continuing  operations  for the quarter ended December
30, 2000. All operating divisions were disposed of during 1999 and 2000, and all
operating activity was reclassified as discontinued  operations.  Since March 2,
2000,  the Company  decided to maintain  its'  situation  as a reporting  public
company,  and to reduce  its' debt in order to make the  Company  attractive  to
private  companies that would want to use Pen to go public.  This approach would
be a major step to  possibly  help to  maintain  some  shareholder  value in the
Company's stock price.

The  Company  did enter  into a Letter of Intent to  reverse  merge with a small
private .com company, perFORMplace.com,  in the entertainment services business.
A definitive  agreement was signed in late August 2000 with the intent to obtain
shareholder ratification at the next shareholders' meeting. However, on November
8, 2000,  before the  meeting  could be held,  perFORMplace.com  terminated  the
merger.  This caused a serious drop in the Company's stock price and the need to
go back out to seek a new merger partner or acquisition.

                                       13

<PAGE>


In December 2000, Pen entered into an agreement with Imaging  Technologies  Inc.
(ITEC) of San Diego, CA whereby Pen will acquire two divisions of ITEC and issue
to ITEC  Pen's  unregistered  common  stock  such that upon  closing  ITEC would
receive  seventy-five  (75)  percent of the  outstanding  shares of Pen. The two
divisions  include  Eduadvantage.com  and  Dealseekers.com  turning  Pen into an
e-commerce  based company.  Due diligence is ongoing.  The  acquisition  will be
subject to shareholder ratification.

Since  the  disposition  of the net  assets  and  operations  of our  historical
operations,  the  Company  has  reduced  its'  staff  to two  employees  and one
part-time  financial  consultant.  The Company has  subsequently  moved to a new
smaller  location a few miles from its former  address,  so as to further reduce
expenses.

Results of Operations

Net sales. With the sale of Powerstream  Division and the voluntary  foreclosure
and sale of assets of InCirT Division during the second quarter of FY2000, which
represent  the only  operating  units of the Company,  and the fact that each is
accounted for in the financial  statements as  discontinued  operations and that
each  division's  operations  have not been  operational  since March 2, 2000, a
comparative analysis against prior same quarter is inappropriate.

Cost  of  sales.  With  the  sale of  Powerstream  Division  and  the  voluntary
foreclosure  and sale of assets of InCirT  Division during the second quarter of
FY2000,  which represent the only operating  units of the Company,  and the fact
that  each  is  accounted  for  in  the  financial  statements  as  discontinued
operations and that each division's  operations have not been operational  since
March 2, 2000, a comparative analysis against prior same quarter.

Operating  expenses.  Operating  expenses  decreased during the first quarter of
fiscal 2001 by approximately $3,356 as compared to same quarter FY 2000.

Other income and  expenses.  Other income and expenses  increased by $63,000 for
the three months  ended  December 31, 2000 as compared to the same period in the
prior  year.  This  increase  is the  Company's  writng  off  $63,000  of  notes
receivable due from perFORMplace.com as uncollectable; consistent with its write
off of previous advances to perFORMplace  during the previous fiscal year. Other
income and expense  (related to  discontinued  operations)  incurred  during the
first quarter of FY 2000 are reflected in the loss from discontinued  operations
of $324,069.

Net earnings (loss) and earnings (loss) per share. Net loss for the first fiscal
quarter  ended  December  31,  2000  totaled  ($294,008)  or ($0.01)  per share,
compared  with losses of  ($530,227)  or ($0.05) per share for the first  fiscal
quarter of FY 2000.  The  decrease in the loss per share of $0.04 is caused by a
($0.01)  decrease  in loss from  discontinued  operations;  from an  increase in
extinguishments of debt; and an increase in loss from impairments. Approximately
($0.03) of per share  improvement is the result of a 201% increase in the number
of outstanding common shares.

                                       14

<PAGE>


Liquidity and Capital Resources

During  the  first  three  months  of FY 2001 the  Company  sustained  losses of
$294,008.
As a result  of these  losses,  the  Company  has had to raise  cash  ($113,750)
through the  exercise of options and  warrants,  representing  1,979,201  common
shares and the issuance of a promissory note for $75,000 during the quarter.

Inflation and Seasonality

The Company does not believe  that it is  significantly  impacted by  inflation.
Without operations the Company is not subject to seasonality.

                                       15

<PAGE>


                                     PART II

                                OTHER INFORMATION


Item 1.  Legal Proceedings.
         ------------------

         From  time to time  the  Company  has  been a party  to  various  legal
         proceedings arising in the ordinary course of business

         1.       On October 28, 1999 Color Savvy Systems,  Ltd.,  filed suit to
                  recover $165,750 in past due uncontested  vendor  obligations.
                  On February 16, 2000,  Color Savvy obtained a judgment against
                  the Company for $165,750.

         2.       On February 15, 2000,  Amistar  Corporation filed suit against
                  the Company to recover $95,733 in uncontested  past due vendor
                  obligations.  As of this  writing,  Amistar has  accepted  the
                  Company's stock for debt offer.

         3.       On March 21, 2000,  Interworks Computer Products,  Inc., filed
                  suit  to  recover  $35,771  in  past  due  uncontested  vendor
                  obligations. Settled in January 2001.

         4.       On July 22,  2000,  Force  Electronics  filed  suit to recover
                  $68,816  in  past  due  uncontested  vendor  obligations,  and
                  obtained a judgment on September 15, 2000.  Settled in January
                  2001.

         5.       Control  Design  Supply/Nedco  filed suit to recover $6,788 in
                  past due uncontested  vendor  obligations.  Settled in January
                  2001.

         6.       On March 20, 2000, DHL Airways Inc. obtained a judgment in the
                  amount of $3,868 for past due uncontested vendor obligation.

         7.       In January 2001 Fidelity  Leasing,  Inc. filed suit to recover
                  $26,608.91  and obtained a judgment for  uncontested  past due
                  lease obligations. Settled in February 2001.

      On November 15,  1999,  Alan L.  Weaver,  former CEO of Pen  Interconnect,
      Inc.,  obtained a judgment  against  the Company in the amount of $135,300
      for breach of a settlement  agreement relative to Mr. Weavers'  employment
      agreement  with the  Company.  The  Company  has  reserved  $135,300  as a
      contingent liability as of September 30, 2000 for this agreement.


Item 2.  Changes in the Securities and Use of Proceeds.
         ----------------------------------------------

            During the quarter 2,979,068 common shares were issued: 3,867 shares
for debt conversion; 70,000 shares for settlement of lawsuit; 300,000 shares for
services;  and 2,605,201 shares for option/warrant  exercises.  Additionally the
Company  issued  a  convertible  promissory  note  for  $75,000.  Cash  proceeds
($188,750) were utilized for corporate operations.

         In October 2000 the Company  issued a  convertible  promissory  note to
         Imaging  Technologies,  Inc.  (ITEC) for $75,000 at an interest rate of
         ten (10)  percent per annum.  ITEC has the right to convert the note to
         unregistered  common stock of the company at a conversion rate of $0.10
         per share.  Upon  conversion,  the Company is required to register  the
         shares  in the next  appropriate  registration  statement  filed by the
         Company.

                                       16

<PAGE>

         The  note  was due  December  9,  2000.  As the  Company  has  signed a
         definitive  agreement  with ITEC to acquire two divisions of ITEC,  the
         lender has agreed to extend the term of the note pending the closing of
         the acquisition.

Item 3.  Defaults Upon Senior Securities.
         --------------------------------

The Company entered into a financing  agreement with a bank for $6,300,000.  The
agreement consisted of a $5,000,000 revolving credit line and two term loans for
$800,000 and $500,000.  Under the loan  agreements for these loans,  the Company
was required to meet certain  financial  ratios and specific  minimum  levels of
earnings and net worth. The loan agreements also restricted  employee  advances,
capital expenditures,  compensation, and additional indebtedness; and restricted
the payment of dividends.  The Company had borrowed $4,436,562 under the line of
credit at September  30, 1999. At times,  including at September  30, 1999,  the
Company  had been in  violation  of  certain  of the  covenants  of this  credit
facility.  The Company  operated  under a  forbearance  agreement  during all of
fiscal 1999.

As of September 30, 1999,  the Company had not received a waiver from the lender
and all  obligations  under this credit  facility  were payable on demand of the
lender  and  were  classified  as  current  liabilities  in the  balance  sheet.
Subsequent  to September  30, 1999,  the lender  declared the loan  agreement in
default.

The Company continued operating under a default notice with its lender and began
seeking  buyers for its two  remaining  divisions  PowerStream  and InCirT.  The
Company solicited a competitor to purchase most of the assets and to negotiate a
supplier  agreement  with the Company's  largest  account as part of a voluntary
foreclosure of all the remaining  assets of the InCirT  division of the Company,
for which Finova had a perfected security  interest.  The Company's December 31,
2000 balance sheet reflects the transfer of all collateral assets to Finova, and
the Company has  recognized  an offset of the bank's line of credit  balance and
term loans owed by the  Company.  The  Company  recorded a loss on  transfer  of
assets of $963,027.

The bank line of credit has a remaining balance due of approximately  $1,400,000
that is not recorded in the financial statements, and remaining estimated assets
to collect  of  approximately  $2,400,000,  which are also not  recorded  in the
financial statements. The Company is currently negotiating an agreement with the
lender,  which it expects will result in complete  satisfaction of all the loans
with the lender in  exchange  for the assets  the  lender  currently  has in its
possession.  The draft agreement also includes the repricing of certain warrants
that the Company has issued to the lender and the issuance of certain  number of
additional warrants to the lender.


                                       17

<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders.

         None during the quarter.

Item 5.  Other Information.   None

Item 6.  Exhibits and Reports on Form 8-K.    None

A.       Exhibits

         11  Calculation of earnings (loss) per share.

         27  Financial Data Schedule.

B.       Reports on Form 8-K.         None


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                             PEN INTERCONNECT, INC.


         February 14, 2001                   By:  /s/ Stephen J. Fryer
                                                 ----------------------
                                                 Stephen J. Fryer,
                                                 CEO,Chairman and
                                                 Principal Accounting Officer


                                       18


<PAGE>


Exhibit 11

                             Pen Interconnect, Inc.

                    CALCULATION OF EARNINGS (LOSS) PER SHARE
                           FOR THE THREE MONTHS ENDED
                           DECEMBER 31, 2000 AND 1999



<TABLE>
<CAPTION>
                                                                                        2000             1999
                                                                                    --------------   -------------
<S>                                                                                 <C>                <C>
Loss available to
   common shareholders                                                              $ (294,008)        $(530,277)
                                                                                    ==============   =============

                Basic EPS
-------------------------------------------

Common shares outstanding entire period                                               27,596,946        9,638,114

Weighted average common shares issued
   during period                                                                       1,478,291           30,556
                                                                                    --------------   -------------

Weighted average commons shares
   outstanding during period                                                           29,075,237       9,668,670
                                                                                    ==============   =============

Loss per common share - basic                                                            $(0.01 )       $  (0.05)
                                                                                    ==============   =============


               Diluted EPS
-------------------------------------------

Weighted average common shares
   outstanding during period - basic                                                29,075,008          9,668,670

Dilutive effect of stock options and
   warrants                                                                                     0               0
                                                                                    --------------   -------------

Weighted average common shares
   outstanding during period - diluted                                              29,075,008          9,668,670
                                                                                    ==============   =============


Loss per common share -
   diluted                                                                              $ (0.01 )       $  (0.05)
                                                                                    ==============   =============


</TABLE>

                                       19