<PAGE>

                                 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
      EXCHANGE ACT OF 1934
      For the quarterly period ended March 31, 2000
                                      or
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from                 to


                        Commission File Number 0-29038

                           TANISYS TECHNOLOGY, INC.
            (Exact name of registrant as specified in its charter)


                Wyoming                                     74-2675493
     (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                   Identification Number)

    12201 Technology Blvd., Suite 125
              Austin, Texas                                   78727
 (Address of principal executive offices)                   (Zip Code)

                                (512) 335-4440
             (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 preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  [X] Yes  [ ] No

     Indicated below is the number of shares outstanding of the Registrant's
common stock at May 1, 2000:

                                                        Number of Shares
          Title of Class                                  Outstanding
          --------------                                  -----------
     Common Stock, no par value                           48,044,716

<PAGE>

                   TANISYS TECHNOLOGY, INC. AND SUBSIDIARIES


                                     INDEX
<TABLE>

<S>       <C>                                                                                                          <C>
PART I  FINANCIAL INFORMATION
Item 1.   Interim Consolidated Financial Statements (Unaudited)
           Consolidated Balance Sheets  March 31, 2000 and September 30, 1999....................................       3
           Consolidated Statements of Operations - For the Three Months and Six Months Ended
              March  31, 2000 and 1999...........................................................................       4
           Consolidated Statements of Cash Flows - For the Three Months and Six Months Ended
              March 31, 2000 and 1999............................................................................       5
           Notes to Interim Consolidated Financial Statements....................................................       6
Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.................      10
Item 3.    Quantitative and Qualitative Disclosures About Market Risk............................................      13

PART II OTHER INFORMATION
Item 1.    Legal Proceedings.....................................................................................      13
Item 2.    Changes in Securities and Use of Proceeds.............................................................      13
Item 6.    Exhibits and Reports on Form 8-K .....................................................................      14
SIGNATURES.......................................................................................................      15
</TABLE>

                                       2
<PAGE>

                        PART 1.  FINANCIAL INFORMATION

Item 1. Financial Statements

                   TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                                         March 31,       September 30,
                                                                           2000              1999
======================================================================================================
<S>                                                                   <C>                <C>
 ASSETS
 Current assets:
    Cash and cash equivalents                                         $  1,328,656        $    684,949
    Restricted cash                                                              -             290,511
    Trade accounts receivable, net of allowance of $219,099
       and $333,703, respectively                                          638,332           1,977,390
    Inventory, net                                                         378,297             540,458
    Prepaid expenses and other                                             227,715             205,974
    Net current assets of discontinued operations                                -           7,610,991
------------------------------------------------------------------------------------------------------
        Total current assets                                             2,573,000          11,310,273
 Property and equipment, net of accumulated depreciation of
    $887,275 and $747,988, respectively                                    359,852             496,391
 Other noncurrent assets                                                    56,338              60,680
 Net other assets of discontinued operations                                     -           4,946,235
------------------------------------------------------------------------------------------------------
        Total Assets                                                  $  2,989,190        $ 16,813,579
======================================================================================================

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
    Accounts payable                                                  $    543,982        $  1,199,200
    Accrued liabilities                                                    221,825             529,087
    Revolving credit note                                                  217,402           1,978,403
    Current portion of obligations under capital lease                      19,422              30,939
    Net current liabilities of discontinued operations                   1,398,539          14,191,919
------------------------------------------------------------------------------------------------------

        Total current liabilities                                        2,401,170          17,929,548
 Long-term debt to stockholders, net of discount                                 -           1,722,749
 Long-term portion of obligations under capital lease                        5,459               9,920
 Net other liabilities of discontinued operations                                -           1,023,982
------------------------------------------------------------------------------------------------------
        Total liabilities                                                2,406,629          20,686,199
------------------------------------------------------------------------------------------------------
 Mandatorily redeemable convertible preferred stock:
    5% Series A Convertible Preferred Stock, $1 par value,
        400 shares authorized, 0 and 225 shares issued and
        outstanding, respectively                                                -           1,831,483
------------------------------------------------------------------------------------------------------
 Stockholders' equity:
    Common stock, no par value, 50,000,000 shares authorized,
        48,044,716 and 24,390,404 shares issued and
        outstanding, respectively                                       37,346,429          31,968,495
    Additional paid-in capital                                           1,687,312           1,687,312
    Accumulated deficit                                                (38,451,180)        (39,359,910)
------------------------------------------------------------------------------------------------------
        Total stockholders' equity                                         582,561          (5,704,103)
------------------------------------------------------------------------------------------------------
        Total liabilities and stockholders' equity                    $  2,989,190        $ 16,813,579
======================================================================================================
</TABLE>

   The accompanying notes are an integral part of these interim consolidated
                             financial statements.

                                       3
<PAGE>

                   TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       For the Three Months             For the Six Months
                                                                          Ended March 31,                 Ended March 31,
                                                                       2000            1999            2000             1999
================================================================================================================================
<S>                                                                <C>              <C>            <C>               <C>
 Net sales                                                         $ 2,044,950      $ 3,194,399    $ 4,061,610       $ 4,845,308
 Cost of goods sold                                                    667,114        1,255,362      1,425,252         2,123,709
--------------------------------------------------------------------------------------------------------------------------------
 Gross profit                                                        1,377,836        1,939,037      2,636,358         2,721,599
--------------------------------------------------------------------------------------------------------------------------------
 Operating expenses:
  Research and development                                             437,631          393,047        756,256           767,293
  Sales and marketing                                                  305,802          441,919        630,360           841,787
  General and  administrative                                          164,457          177,555        329,525           327,978
  Depreciation and amortization                                         25,021           47,432         79,473            85,728
--------------------------------------------------------------------------------------------------------------------------------
        Total operating expenses                                       932,911        1,059,953      1,795,614         1,922,786
--------------------------------------------------------------------------------------------------------------------------------
 Operating income                                                      444,925          879,084        840,744           798,813
 Other income (expense):
  Interest income                                                        4,730            3,979          6,989             9,075
  Interest expense                                                    (115,587)         (85,560)      (205,508)         (166,244)
  Other                                                                151,448           (2,326)       123,155                 -
--------------------------------------------------------------------------------------------------------------------------------

 Net income before discontinued operations                         $   485,516      $   795,177    $   765,380       $   641,644
 Loss from discontinued operations                                           -       (1,540,539)             -        (2,328,676)
--------------------------------------------------------------------------------------------------------------------------------
 Net income (loss)                                                     485,516         (745,362)       765,380        (1,687,032)
================================================================================================================================

 Income from continuing operations                                 $   485,516      $   795,177    $   765,380       $   641,644
  Preferred stock dividend and amortization of the value of the
  beneficial conversion feature on the preferred stock                 (16,809)        (249,837)       (44,021)         (733,860)
--------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) from continuing operations applicable
  to common stock holders                                              468,707          545,340        721,359           (92,216)
 Loss from discontinued operations                                           -       (1,540,539)             -        (2,328,676)
--------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stock holders              $   468,707      $  (995,199)   $   721,359       $(2,420,892)
================================================================================================================================
 Basic income (loss) per common shares:
  Income from continuing operations applicable
   to common stockholders                                          $      0.01      $      0.02    $      0.02       $      0.01
  Loss from discontinued operations                                          -            (0.06)             -             (0.11)
--------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stock                      $      0.01      $     (0.04)   $      0.02       $     (0.12)
================================================================================================================================
 Diluted income (loss) per common shares:
  Income (loss) from continuing operations applicable
   to common stockholders                                          $      0.01      $     (0.02)   $      0.02       $      0.01
  Loss from discontinued operations                                          -            (0.06)             -             (0.11)
--------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stock                      $      0.01      $     (0.04)   $      0.02       $     (0.12)
================================================================================================================================
</TABLE>

   The accompanying notes are an integral part of these interim consolidated
                             financial statements.

                                       4
<PAGE>
                    TANISYS TECHNOLOGY, INC. and SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                           For the Three Months            For the Six Months
                                                               Ended March 31,               Ended March 31,
                                                             2000          1999            2000          1999
=================================================================================================================
<S>                                                     <C>            <C>            <C>            <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                      $   485,516    $  (745,362)   $   765,380    $(1,687,032)
 Deduct: Net loss from discontinued operations                   --     (1,540,539)            --     (2,328,676)
----------------------------------------------------------------------------------------------------------------
 Net income from continuing operations                      485,516        795,177        765,380        641,644
 Adjustment to reconcile net loss to net cash used in
      operating activities:
        Depreciation and amortization                        58,406         40,376        150,481         92,260
        Gain on sale of fixed assets                         (2,326)            --         (2,326)            --
 Changes in operating assets:
      Restricted cash                                            --         15,887        290,511        154,063
      Accounts receivable, net                              947,461       (365,025)     1,339,058     (1,289,481)
      Inventory, net                                        (65,387)       281,009        162,161         62,553
      Prepaid expenses and other                             24,600        (20,183)       (21,741)       (42,380)
      Other noncurrent assets                                (1,270)         1,188          1,816         (8,105)
      Accounts Payable                                     (188,758)      (402,115)      (655,218)       (13,353)
      Accrued liabilities                                  (232,815)       (44,428)      (281,433)      (229,026)
----------------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) operating
         activities of continuing operations              1,025,427        301,887      1,748,689       (631,824)
----------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from the sale of fixed assets                       4,000             --          4,000             --
 Purchases of fixed assets                                  (13,090)       (19,770)       (13,090)       (55,879)
----------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities of continuing
  operations                                                 (9,090)       (19,770)        (9,090)       (55,879)
----------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of debt to stockholders                  --             --             --      2,000,000
 Draws (repayments) on revolving credit note, net          (528,497)       497,339     (1,761,001)     1,354,341
 Payment of debt financing costs                             91,863         32,751        149,554         32,751
 Issuance on common stock for payment of services           406,036             --        406,036             --
 (Repayments) of debt to stockholders                      (200,000)            --             --             --
 Proceeds from exercise of stock options and warrants       108,333        282,500        108,333        496,250
 Proceeds from issuance of common stock                   1,223,000             --      1,223,000             --
 (Payments)  proceeds on capital lease obligations          (10,434)        (3,868)       (15,978)        69,345
----------------------------------------------------------------------------------------------------------------
         Net cash provided by financing activities
           of continuing operations                       1,090,301        808,722        109,944      3,952,687
----------------------------------------------------------------------------------------------------------------
 Net cash used in discontinued operations                  (842,758)      (294,283)    (1,205,836)    (1,943,890)
----------------------------------------------------------------------------------------------------------------
 Net increase in cash and cash equivalents                1,263,880        796,556        643,707      1,321,094
 Cash and cash equivalents, beginning of period              64,776        763,984        684,949        239,446
----------------------------------------------------------------------------------------------------------------
 Cash and cash equivalents, end of period               $ 1,328,656    $ 1,560,540    $ 1,328,656    $ 1,560,540
================================================================================================================

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid for interest                            $   103,767    $    83,533    $   188,719    $   162,509
      Interest received                                       4,730          4,813          6,989         10,527
 NON-CASH INVESTING AND FINANCING ACTIVITIES:
      Capital lease additions                                    --         95,000             --      1,094,039
      Issuance of stock warrants for compensation            60,000             --         60,000         75,000
      Issuance of stock warrants in connection with
         issuance of debt to shareholders                        --             --             --        461,538
      Preferred stock dividends paid in common stock         28,103         45,973         55,315         51,768
      Preferred stock dividends accrued                          --         34,642             --         77,767
      Amortization of beneficial conversion feature on
         preferred stock                                         --        215,195             --        865,493
      Conversion of preferred stock to common stock       1,709,383        732,593      1,831,482      1,180,289
================================================================================================================
</TABLE>

          The accompanying notes are an integral part of these interim
                       consolidated financial statements.

                                       5
<PAGE>

                           Tanisys Technology, Inc.
                  Notes to Consolidated Financial Statements
                                  (Unaudited)


NOTE 1:   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
          ACCOUNTING POLICIES

Basis of Presentation

     The accompanying unaudited interim consolidated financial statements
include the accounts of Tanisys Technology, Inc. ("Tanisys") and its wholly
owned subsidiaries, 1st Tech Corporation ("1st Tech"), DarkHorse Systems, Inc.
("DarkHorse"), and Rosetta Marketing and Sales Inc., and also include the
accounts of Tanisys (Europe) Ltd., located in Scotland, for the three months and
six months ended March 31, 1999 (collectively, the "Company").  The stock of
Tanisys (Europe) Ltd. was sold on December 9, 1999 (see Note 2 below). The
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles.  All significant intercompany balances
and transactions have been eliminated in consolidation.

     The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements.  It is recommended that these unaudited interim
consolidated financial statements be read in conjunction with the Company's
consolidated financial statements and the notes thereto for the fiscal year
ended September 30, 1999 contained in the Company's Form 10-K filed with the
Securities and Exchange Commission on February 23, 2000.

     The Company designs, manufactures and markets memory module test systems
and provides design services in conjunction with the licensing of its touch
sensor products.

     On December 9, 1999, the Company sold its memory module manufacturing
business, including all of the common stock of Tanisys (Europe), Ltd.  The
assets, liabilities and the loss from the sale of the memory module
manufacturing business have been included in the accompanying interim
consolidated financial statements as discontinued operations.

NOTE 2.   DISCONTINUED OPERATIONS

     On December 9, 1999, the Company sold certain assets of its memory module
manufacturing business, including all the stock of Tanisys (Europe) Ltd., a
wholly owned subsidiary of the Company located in Scotland.  The sale also
included the assumption of certain liabilities by the buyer.  The results of the
memory module manufacturing business have been classified as discontinued, and
prior periods have been restated to reflect the sale.

     The loss on the sale, as well as the costs associated with the disposition
of the memory module manufacturing business, has been recorded in the financial
statements as of September 30, 1999. Included in the loss is an accrual of
$1,398,539 as of March 31, 2000, which represents the Company's best estimate of
the remaining costs associated with the disposition of the discontinued
operations.

                                       6
<PAGE>

NOTE 3:  INVENTORY

     Inventory consists of the following:

                                              March 31,      September 30,
                                                2000             1999
                  --------------------------------------------------------
                   Raw materials               $216,090           $297,252
                   Work-in-process               30,304             21,648
                   Finished goods               131,903            221,558
                  --------------------------------------------------------
                   Total inventory             $378,297           $540,458
                  --------------------------------------------------------


     Inventory is stated at the lower of cost or market value.  Inventory costs
include direct materials, direct labor and certain indirect manufacturing
overhead expenses.

NOTE 4:  LONG-TERM DEBT

     In November 1998, the Company issued $2,000,000 in debt with attached stock
warrants to certain stockholders of the Company.  The debt was due in two years
and carried an interest rate of 10 percent per annum, due quarterly and payable
in either unregistered shares of common stock or cash, at the option of the
Company.  One stock warrant was issued for each dollar of debt, resulting in the
issuance of 2,000,000 stock warrants.  Each warrant was exercisable into one
share of common stock beginning on December 1, 1998, at an exercise price of
$0.25 per share and increased to $0.50 per share after August 1, 1999.   The
exercise price will increase to $1.00 per share after October 1, 2000.  The
warrants expire on November 1, 2001.  The Noteholders, as of March 31, 2000,
were issued 1,750,000 shares of common stock upon the exercise of certain
warrants.  The stock warrants and underlying shares of common stock carry no
registration rights. The Company determined the fair value of the warrants to be
approximately $461,538 and reflected this value as a discount on the debt.  The
debt discount was being amortized to interest expense over the life of the
related debt.

     In connection with the placement and issuance of this debt, the Company
incurred costs of $21,000  and issued 100,000 stock warrants to the Company's
chairman of the board and 25,000 stock warrants to its external counsel.  Each
warrant is exercisable into one share of common stock at $0.01 per share
beginning on December 1, 1998, and the warrants expire on November 1, 2001.  As
of March 31, 2000, all of these warrants had been exercised for 125,000 shares
of common stock.  These shares of common stock carry no registration rights.
The Company valued the warrants at $0.60 per share, or $75,000.  The total debt
issuance costs of $96,000 have been reflected in other noncurrent assets in the
accompanying unaudited consolidated balance sheet and were being amortized over
the life of the related debt.

     During the quarter ended March 31, 2000, all of the $2,000,000 in debt to
certain stockholders was  converted to 8,000,000 shares of Common Stock.  Along
with the notes payable to these stockholders, all related discounts and debt
issuance costs have been charged to Common Stock on the accompanying unaudited
consolidated balance sheet.

NOTE 5:  PREFERRED STOCK

     Pursuant to a Convertible Stock Purchase Agreement dated June 30, 1998 (the
"Stock Purchase Agreement"), the Company issued 400 shares of its 5% Series A
Convertible Preferred Stock, par value $1 per share ("Series A Stock"), for $4
million.

     The Series A Stock was convertible into the Company's no par value common
stock ("Common Stock") at the option of the holder. The conversion price was the
lesser of the fixed conversion price of $2.31 per share or a variable conversion
price.  The Company has valued this beneficial conversion feature at $1,403,509
and has reflected this amount in additional paid-in capital and as a charge to
the accumulated deficit.  The $1,403,509 beneficial conversion feature was fully
amortized and changed to accumulated deficit as of the quarter ended March 31,
1999.

                                       7
<PAGE>

     Dividends were payable quarterly in either cash or shares of Common Stock.
However, all dividends were paid in shares of Common Stock.  For the quarters
ended March 31, 2000 and March 31, 1999, the Company paid dividends of $28,103
and $45,973 by issuing 145,553 shares and 35,791 shares of Common Stock,
respectively.

     Attached to the Series A Stock were warrants to purchase 199,999 shares of
Common Stock. During the quarter ended March 31, 2000, a portion of these
warrants were exercised for 133,333 shares of Common Stock.  The remaining
warrants are currently exercisable at $3.00 per share and expire on June 30,
2002.  The Company has valued the original warrants at $283,803 and reflected
this amount in additional paid-in capital during the year ended September 30,
1998.

     During the quarter ended March 31, 2000, the Company converted all of the
remaining 210 shares of Series A Stock for 8,814,106 shares of Common Stock.


NOTE 6:  EARNINGS PER SHARE

     Basic income or loss per common share is computed based on the weighted
average number of common shares outstanding during each period. For the quarter
ended March 31, 2000, diluted income per common share is computed based on the
weighted average number of common shares outstanding after giving effect to the
potential issuance of Common Stock on the exercise of options and warrants.  For
the quarter ended March 31, 1999, potentially dilutive securities have not been
included in the diluted loss per common share calculation as they would have
been antidilutive.  The following table provides a reconciliation between basic
and diluted shares outstanding:

<TABLE>
<CAPTION>
                                                       For the Three Months Ended            For the Six Months Ended
                                                                March 31,                            March 31,
                                                         2000              1999              2000                1999
========================================================================================================================
<S>                                                    <C>            <C>               <C>                 <C>
 Net income (loss)                                     $   485,516    $  (745,362)      $   765,380         $ (1,687,032)
 Less-
    Series A Stock dividends                               (16,809)       (34,642)          (44,021)             (83,562)
    Amortization of the value of the
      beneficial conversion feature
      on the Series A Stock                                      -       (215,195)                -             (865,493)
------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to Common
    Stock (basic and diluted)                          $   468,707    $  (995,199)      $   721,359         $ (2,636,087)
========================================================================================================================
 Weighted average number of common
    shares used in basic earning per share              34,893,692     23,121,625        29,871,930           22,074,154

 Effect of dilutive securities
       Stock Options                                     1,890,217              -         1,890,217                    -
       Warrants                                            786,666              -           786,666                    -
------------------------------------------------------------------------------------------------------------------------
 Weighted average number of common
    shares and dilutive potential Common
    Stock used in dilutive earning per share            37,570,575     23,121,625        32,548,813           22,074,154
========================================================================================================================
</TABLE>

                                       8
<PAGE>

The following calculates the amount used in computing diluted earnings per share
and the effect on income:

<TABLE>
<CAPTION>
                                                                      For the Three        For the Six
                                                                      Months Ended         Months Ended
                                                                     March 31, 2000       March 31, 2000
                                                                   =======================================
<S>                                                                <C>                     <C>
              Diluted earnings per share:
                Income from continuing operations
                 applicable to common stockholders                      $      468,707        $     721,359
                Income impact of assumed conversions:
                 Series A Stock dividends                                       16,809               44,021
                                                                   ----------------------------------------
              Net income applicable to common
                 stockholders after assumed conversion
                 of dilutive securities                                 $      485,516        $     765,380
                                                                   ========================================
</TABLE>


NOTE 7:  COMPREHENSIVE INCOME

     Effective October 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income."  This standard establishes rules for the reporting of
comprehensive income and its components.  Comprehensive income consists of net
income and foreign currency translation adjustments, as follows:


<TABLE>
<CAPTION>
                                                  For the Three Months Ended                   For the Six Months Ended
                                                           March 31,                                   March 31,
                                                    2000                 1999                  2000                1999
---------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                 <C>                  <C>
 Net income (loss), as reported                      $    485,516      $  (745,362)         $  765,380         $  (1,687,032)
 Foreign currency translation adjustment                        -          (53,521)                  -               (16,898)
---------------------------------------------------------------------------------------------------------------------------------
 Comprehensive income (loss)                         $    485,516      $  (798,883)         $  765,380         $  (1,703,930)
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The adoption of this standard had no net effect on the Company's net loss
or stockholders' equity for the three months and six months ended March 31, 2000
and 1999, respectively. Prior year financial statements have been reclassified
to conform to the requirements of this standard.

NOTE 8:  SUBSEQUENT EVENT(S)

     On April 3, 2000, the Company entered into an agreement with Silicon Valley
Bank under an asset based lending agreement whereby the Company can borrow
against its outstanding accounts receivable up to a maximum of $2,000,000. This
agreement supersedes the December 17, 1999 Accounts Receivable Purchase
Agreement with the same lender and significantly improves the financing terms,
thus decreasing the costs of financing.

                                       9
<PAGE>

This Quarterly Report on Form 10-Q contains certain forward-looking statements
and information relating to Tanisys and its subsidiaries that are based on the
beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. When used in this
report, the words "anticipate," "believe," "estimate," "expect," and "intend"
and words or phrases of similar import, as they relate to the Company or its
management, are intended to identify forward-looking statements. Such statements
reflect the current risks, uncertainties and assumptions related to certain
factors including, without limitations, competitive factors, general economic
conditions, customer concentrations, customer relationships and financial
conditions, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, one-time events and other factors described herein. Based upon
changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

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

Overview

     The following is a discussion of the interim consolidated financial
condition and results of operations of the Company for the three months ended
March 31, 2000 and 1999. It should be read in conjunction with the unaudited
interim Consolidated Financial Statements, the Notes thereto and other financial
information included elsewhere in this report, and in the Company's Annual
Report Form 10-K for the year ended September 30, 1999 filed with the Securities
and Exchange Commission on February 23, 2000. For purposes of the following
discussion, references to year periods refer to the Company's fiscal year ended
September 30, 1999 and references to quarterly periods refer to the Company's
fiscal quarters ended March 31, 2000 and 1999.

     On December 9, 1999, the Company sold its memory module manufacturing
business, including all of the common stock of Tanisys (Europe), Ltd. The
assets, liabilities and the loss from the sale of the memory module
manufacturing business have been included in the accompanying interim
consolidated financial statements as discontinued operations.

     Following the sale of its memory module manufacturing business, the Company
has refocused its efforts on its memory module test systems business. The
Company also retained its proprietary Tanisys Touch technology, available for
licensing to third parties. After closing of the sale of the memory module
manufacturing business, the Company has the same directors and retains its
officers associated with the memory module test systems business, including
Charles T. Comiso as the Company's President and Chief Executive Officer.

     Although there can be no assurance that the sale of the memory module
manufacturing business will have the intended effect on the Company's financial
condition and continuing operations, management believes that the Company's
retained memory module test systems business will be able to succeed on its own,
generate a positive cash flow and yield net profits for the Company.

     The results of the memory module manufacturing business have been
classified as discontinued operations, and prior periods have been restated to
reflect the sale. The loss on the sale, as well as the costs associated with the
disposition of the memory module manufacturing business, have been recorded in
the Consolidated Financial Statements as of September 30, 1999.

                                       10
<PAGE>

Results of Operations

     The following table sets forth certain consolidated operations data of the
Company expressed as a percentage of net sales (unaudited) for the three months
and six months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>

                                                                 For the Three           For the Six
                                                                 Months Ended            Months Ended
                                                                   March 31,                March 31,
                                                                 2000     1999           2000     1999
================================================================================      ==================
<S>                                                             <C>      <C>          <C>        <C>
 Net sales                                                      100.0%   100.0%         100.0%   100.0%
 Cost of goods sold                                              32.6%    39.3%          35.1%    43.8%
--------------------------------------------------------------------------------      ------------------
 Gross profit                                                    67.4%    60.7%          64.9%    56.2%
--------------------------------------------------------------------------------      ------------------
 Operating expenses:
            Research and development                             22.0%    12.4%          18.9%    15.9%
            Sales and marketing                                  15.1%    13.9%          15.6%    15.3%
            General and administrative                            8.4%     5.7%           8.3%     6.9%
            Depreciation and amortization                         0.1%     1.2%           1.4%     1.6%
--------------------------------------------------------------------------------      ------------------
                               Total operating expenses          45.6%    33.2%          44.2%    39.7%
--------------------------------------------------------------------------------      ------------------
 Operating income                                                21.8%    27.5%          20.7%    16.5%
--------------------------------------------------------------------------------      ------------------
 Other income (expense):
            Interest income                                       0.2%     0.1%           0.2%     0.2%
            Interest expense                                     (5.6%)   (2.7%)         (5.1%)   (3.4%)
            Other income                                          7.4%     0.0%           3.0%     0.0%
--------------------------------------------------------------------------------      ------------------
 Net income before discontinued operations                       23.7%    24.9%          18.8%    13.3%
--------------------------------------------------------------------------------      ------------------
 Loss from discontinued operations                                0.0%   (48.2%)          0.0%   (48.1%)
--------------------------------------------------------------------------------      ------------------
 Net Income (loss)                                               23.7%   (23.3%)         18.8%   (34.8%)
================================================================================      ==================
</TABLE>

Net Sales

     Net sales consist of memory module test systems, less returns and
discounts.  Net sales decreased to $2,044,950 in the second quarter of fiscal
2000 from $3,194,399 in the same period of fiscal 1999. The quarter ended March
31, 1999 was an exceptional quarter for sales due to the introduction of the
SIGMA3 and its acceptance into the marketplace to test the newly accepted
industry standard of PC 100 Sync DRAM for personal computers.  Therefore, the
decline in net sales is primarily due to the initial success of a new product
offering in the second fiscal quarter of 1999. However, net revenues were
sustained for the quarter ended March 31, 2000 when compared to the quarter
ended December 31, 1999.  Many factors will affect the Company's ability to
increase and/or maintain sales levels.  See the Company's Form 10-K filed with
the Securities and Exchange Commission on February 23, 2000 for a complete list
of  "Risk Factors."

Cost of Sales and Gross Profit

     Cost of sales includes the costs of all components and materials purchased
for the manufacture of products and the direct labor and overhead costs
associated with manufacturing.  Gross profit decreased from $1,939,037 in the
second quarter of fiscal 1999 to $1,377,836 in the second quarter of fiscal 2000
due to the revenue decrease for the same period.  However, gross profit as a
percent of sales increased to 67.4% in the second fiscal quarter of 2000 from
60.7% in the second fiscal quarter of 1999. The increase in gross profit margin
was due primarily to increased manufacturing cost efficiencies.

Research and Development

     Research and development expenses consist of the costs associated with the
design and testing of new technologies and products.  These relate primarily to
the costs of materials, personnel, management and employee compensation and
engineering design consulting fees.  Research and development expenses increased
to $450,535 in the second quarter of fiscal 2000 from $396,254 in the second
quarter of fiscal 1999, representing a increase of 14%.  The increase in
research and development expenses is due to expenditures for development of test
systems for new technologies.   Research and development expenditures are
expected to continue to increase as resources are allocated to develop new test
systems and enhance current test systems to meet the market demands for the
testing of new memory technologies.

                                       11
<PAGE>

Sales and Marketing

     Sales and marketing expenses include all compensation of employees and
independent sales personnel, as well as the costs of advertising, promotions,
trade shows, travel, direct support and overhead.  Sales and marketing expenses
decreased to $308,418 in the second fiscal quarter of 2000 from $443,580 in the
same period of fiscal 1999.  Sales and marketing expenses expressed as a
percentage of revenues in the second quarter of fiscal 2000 and 1999 were 15.1%
and 13.9%, respectively.  The decrease in sales and marketing expenses are
attributable to additional expenses that were focused on introducing the
DarkHorse SIGMA3 memory module test system in the quarter ended March 31, 1999.
Sales and marketing expenses are expected to increase in terms of absolute
dollars and to decrease as a percentage of revenues in future periods as growth
in revenue occurs.

General and Administrative

     General and administrative expenses consist primarily of personnel costs,
including employee compensation and benefits, and support costs including
utilities, insurance, professional fees and all costs associated with a
reporting company.  General and administrative expenses for the second quarter
of fiscal 2000 decreased 6%, or $10,704, to $171,432 from $182,136 for the same
quarter of fiscal 1999.  When expressed as a percentage of sales, general and
administrative expenses increased from 6% in the second quarter of fiscal 1999
to 8% in same quarter of fiscal 2000. The absolute dollar expenses associated
with the general and administrative area are expected to increase at a much
slower pace than revenues in future periods with the anticipated continued
growth in business activity.

Depreciation and Amortization

     Depreciation and amortization includes the depreciation for all fixed
assets exclusive of those used in the manufacturing process and included as part
of "Cost of Goods Sold" and the amortization of intangibles, including patents
related to memory module test systems technology.  Depreciation and amortization
decreased to $25,021 in the second quarter of fiscal 2000 from $47,432 in the
same quarter of fiscal 1999.   This decrease was due to a non-recurring
adjustment in depreciation expense for the quarter ended March 31, 2000.

Other Income (Expense), Net

  Other income (expense), net consists primarily of interest income less
interest expense.  Interest expense is attributable to the Company's working
capital loan facilities.  Substantially all of the interest expense relates to
credit line draws made for short-term inventory requirements and to fund
accounts receivable.  Interest income relates to the investment of available
cash in short-term interest bearing accounts and cash equivalent securities.
Other income (expense) increased to $40,591 of income in the second quarter of
fiscal 2000 from $83,907 of expense in the second quarter of fiscal 1999.  The
increase in other income (expense) is primarily due to an increase in non-
recurring miscellaneous income.

Liquidity and Capital Resources

     Since inception, Tanisys has utilized the funds acquired in equity
financings of its Common Stock and preferred stock, the exercise of stock
warrants and stock options, capital leases, operating leases, vendor credits,
certain bank borrowings, and funds generated from operations to support its
operations, carry on research and development activities, acquire capital
equipment, finance inventories and accounts receivable balances, and pay its
general and administrative expenses.

     During the second quarter of fiscal 2000, the Company closed a private
placement of its Common Stock for a total of $1,223,000, a major portion having
been purchased by employees of the Company.  The Company also reduced its
revolving credit line by $528,497 and paid off $200,000 in short-term debt to
stockholders.  In addition, the Company generated $1,025,427 of cash from its
operating activities of continuing operations during the quarter ended March 31,
2000.  The Company had $1,328,656 in cash and  working capital of $171,830 at
March 31, 2000, an increase in working capital of $2,381,836 from the prior
fiscal quarter ended December 31, 1999.

                                       12
<PAGE>

Significant Customer Concentration

     A significant percentage of the Company's net sales is produced by a
relatively small number of customers. In the second quarter of fiscal 2000, the
ten largest customers accounted for approximately 93% of net sales compared to
approximately 88% in the same period in fiscal 1999. Three customers represented
24%, 22% and 9% of sales, respectively, in the second quarter of fiscal 2000;
the customer that represented 22% of sales in the second quarter of fiscal 2000
also represented 54% of sales in the same period in fiscal year 1999. However,
there were no other customers to compare between the second quarters in both
1999 and 2000. While the Company expects to continue to be dependent on a
relatively small number of customers for a significant percentage of its net
sales, there can be no assurance that any of the top ten customers will continue
to utilize the Company's products or services.

     The Company in general has no firm long-term volume commitments from its
customers and generally enters into individual purchase orders with its
customers.  Customer purchase orders are subject to change, cancellation, or
delay with little or no consequence to the customer.  The Company has
experienced such changes and cancellations and expects to continue to do so in
the future.  The replacement of cancelled, delayed or reduced purchase orders
with new business cannot be assured.  The Company's business, financial
condition and results of operations will depend significantly on its ability to
obtain purchase orders from existing and new customers, upon the financial
condition and success of its customers, the success of customers' products and
the general economy.  Factors affecting the industries of the Company's major
customers could have a material adverse effect on the Company's business,
financial condition and results of operations.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The Company does not believe that there is any material risk exposure with
respect to derivative or other financial instruments which would require
disclosure under this item.


                          PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     Nine former employees have filed a lawsuit against the Company claiming a
violation of the U.S. Department of Labor's Worker Adjustment and Retraining
Notification Act (the "WARN Act").  The Company laid off 20 employees on October
21, 1999, to reduce costs.  When the Company agreed to sell its memory module
manufacturing business to All Components, Inc., the Company laid off 47
employees whose jobs were no longer needed at All Components, Inc. or the
Company.  In the event of layoffs, the WARN Act stipulates that under certain
circumstances, specific notification periods must be followed.  The Company
believes that it is in compliance with the WARN Act and is actively defending
its position.

     The Company believes it is unlikely that the final outcome of the above
lawsuit or any other known or  unknown claims to which the Company is or becomes
a party would have a material adverse effect on the Company's financial position
or results from operations; however, due to the inherent uncertainty of
litigation, there can be no assurance that the resolution of any particular
claim or proceeding would not have a material adverse effect on the Company's
results of operations for the fiscal period in which such resolution occurred.

Item 2.  Changes in Securities and Use of Proceeds

(a)  Not applicable.

(b)  Not applicable.

(c)  In February 2000, all of the $2,000,000 of unsecured debt issued by the
     Company in November 1998 to certain stockholders of the Company, plus
     accrued interest through the conversion date, was converted into equity
     through the issuance of 8,042,626 shares of Common Stock.

                                       13
<PAGE>

     In February and March 2000, the Company issued 8,814,106 shares of its
     Common Stock upon conversion by the holders of 210 shares of its 5% Series
     A Convertible Preferred Stock, par value $1 per share ("Series A Stock"),
     which represented all of the unconverted shares of Series A Stock.  In
     addition, 133,333 of the 199,999 warrants attached to the Series A Stock
     were exercised for 133,333 shares of Common Stock.

     In March 2000, the Company issued 3,057,500 shares of its Common Stock for
     consideration of $1,223,000.  The shares of Common Stock issued in the
     private placement are restricted securities.  The transaction was exempt
     from registration pursuant to Section 4(1) of the Securities Act of 1933,
     as amended.  Proceeds of the private placement are being used for working
     capital.

(d)  Not applicable.


Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits:

        The exhibit listed below is filed as part of this report.


        Exhibit
        Number                                   Description
        ------                                   -----------

         27.1   Financial Data Schedule (filed herewith)

(b)  Current Reports on 8-K:

         Form 8-K dated January 12, 2000, and filed January 20, 2000, reporting
     a change in the Company's independent auditors.


Items 3, 4 and 5 are not applicable and have been omitted.

                                       14
<PAGE>

                                   SIGNATURES

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

                                        TANISYS TECHNOLOGY, INC.


Date:  May 9, 2000                          By:  /s/ CHARLES T. COMISO
                                                 ------------------------------
                                                 Charles T. Comiso
                                                 Chief Executive Officer,
                                                 President and Director


Date:  May 9, 2000                          By:  /s/ TERRY W. REYNOLDS
                                                 ------------------------------
                                                 Terry W. Reynolds
                                                 Vice President of Finance
                                                 (Duly authorized and Principal
                                                 Accounting Officer)

                                       15