<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 June 30, 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 August 11, 2000:

                                                          Number of Shares
                Title of Class                              Outstanding
                --------------                              -----------
            Common Stock, no par value                       24,022,358
<PAGE>

                   TANISYS TECHNOLOGY, INC. AND SUBSIDIARIES


                                     INDEX
<TABLE>
<S>                                                                                                                   <C>
PART I    FINANCIAL INFORMATION
Item 1.     Interim Consolidated Financial Statements (Unaudited)
             Consolidated Balance Sheets - June 30, 2000 and September 30, 1999......................................  3
             Consolidated Statements of Operations - For the Three Months and Nine Months Ended
                June  30, 2000 and 1999..............................................................................  4
             Consolidated Statements of Cash Flows - For the Three Months and Nine Months Ended
                June  30, 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........................................................................................... 11
Item 3.      Quantitative and Qualitative Disclosures About Market Risk.............................................. 14

PART II   OTHER INFORMATION
Item 1.      Legal Proceedings....................................................................................... 14
Item 4.      Submission of Matters to a Vote of Security Holders..................................................... 15
Item 6.      Exhibits and Reports on Form 8-K........................................................................ 15
SIGNATURES........................................................................................................... 16
</TABLE>

                                       2
<PAGE>

                         PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

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


<TABLE>
<CAPTION>
                                                                             June 30,        September 30,
                                                                               2000              1999
============================================================================================================
<S>                                                                          <C>             <C>
 ASSETS
 Current assets:
      Cash and cash equivalents                                              $  1,208,278     $     684,949
      Restricted cash                                                                   -           290,511
      Trade accounts receivable, net of allowance of $226,026 and
         $333,703, respectively                                                 1,803,494         1,977,390
      Inventory, net                                                              345,302           540,458
      Prepaid expenses and other                                                  127,062           205,974
      Net current assets of discontinued operations                                     -         7,610,991
------------------------------------------------------------------------------------------------------------
         Total current assets                                                   3,484,136        11,310,273
 Property and equipment, net of accumulated depreciation of
      $922,580 and $747,988, respectively                                         340,486           496,391
 Other noncurrent assets                                                           53,777            60,680
 Net other assets of discontinued operations                                            -         4,946,235
------------------------------------------------------------------------------------------------------------
         Total Assets                                                        $  3,878,399     $  16,813,579
============================================================================================================
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
      Accounts payable                                                       $    658,115     $   1,199,200
      Accrued liabilities                                                         416,564           529,087
      Revolving credit note                                                       604,434         1,978,403
      Current portion of obligations under capital lease                           15,274            30,939
      Net current liabilities of discontinued operations                          930,278        14,191,919
------------------------------------------------------------------------------------------------------------
         Total current liabilities                                              2,624,665        17,929,548
 Long-term debt to stockholders, net of discount                                        -         1,722,749
 Long-term portion of obligations under capital lease                               2,771             9,920
 Net other liabilities of discontinued operations                                       -         1,023,982
------------------------------------------------------------------------------------------------------------
         Total liabilities                                                      2,627,436        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,
          24,022,358 and 11,971,011 shares issued and outstanding,
          respectively                                                         37,346,429        31,968,495
      Additional paid-in capital                                                1,710,589         1,687,312
      Accumulated deficit                                                     (37,806,055)     (39,359,910)
------------------------------------------------------------------------------------------------------------
         Total stockholders' equity                                             1,250,963       (5,704,103)
------------------------------------------------------------------------------------------------------------
         Total liabilities and stockholders' equity                          $  3,878,399     $ 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 Nine Months
                                                                      Ended June 30,                  Ended June 30,
                                                                   2000            1999            2000           1999
==============================================================================================================================
<S>                                                           <C>              <C>               <C>             <C>
 Net sales                                                    $  2,430,272     $  3,368,000      $  6,491,882    $   8,213,308
 Cost of goods sold                                                834,203          981,707         2,259,455        3,105,416
------------------------------------------------------------------------------------------------------------------------------
 Gross profit                                                    1,596,069        2,386,293         4,232,427        5,107,892
------------------------------------------------------------------------------------------------------------------------------
 Operating expenses:
    Research and development                                       621,632          412,065         1,377,888        1,179,358
    Sales and marketing                                            380,343          412,969         1,010,703        1,154,756
    General and administrative                                     185,655          179,284           515,180          507,262
    Depreciation and amortization                                   26,273           36,799           105,746          122,527
------------------------------------------------------------------------------------------------------------------------------
        Total operating expenses                                 1,213,903        1,041,117         3,009,517        2,963,903
------------------------------------------------------------------------------------------------------------------------------
 Operating income                                                  382,166        1,345,176         1,222,910        2,143,989
 Other income (expense):
    Interest income                                                  7,808            7,645            14,797           16,720
    Interest expense                                               (17,977)        (107,332)         (223,485)        (273,576)
    Other                                                           23,129            2,130           146,284            2,130
------------------------------------------------------------------------------------------------------------------------------
 Net income before discontinued operations                         395,126        1,247,619         1,160,506        1,889,263
 Income (loss) from discontinued operations                        250,000       (1,707,659)          250,000       (4,036,335)
------------------------------------------------------------------------------------------------------------------------------
 Net income (loss)                                            $    645,126    $    (460,040)   $    1,410,506   $   (2,147,072)
==============================================================================================================================
 Income from continuing operations                            $    395,126    $   1,247,619    $    1,160,506   $    1,889,263
    Preferred stock dividend and amortization of the
     value of the beneficial conversion feature on the
     preferred stock                                                     -          (30,235)          (44,021)        (979,290)
------------------------------------------------------------------------------------------------------------------------------
 Net income from continuing operations applicable
     to common stockholders                                        395,126        1,217,384         1,116,485         909,973
 Income (loss) from discontinued operations                        250,000       (1,707,659)          250,000       (4,036,335)
------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stockholders          $    645,126    $    (490,275)   $    1,366,485   $   (3,126,362)
------------------------------------------------------------------------------------------------------------------------------
 Basic income (loss) per common share:
    Income from continuing operations applicable
     to common stockholders                                   $       0.02    $        0.10    $         0.06   $         0.08
    Income (loss) from discontinued operations                        0.01            (0.14)             0.01            (0.36)
------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stock                 $       0.03    $       (0.04)    $        0.08   $        (0.28)
------------------------------------------------------------------------------------------------------------------------------
 Diluted income (loss) per common share:
    Income from continuing operations applicable
     to common stockholders                                   $       0.02    $        0.10    $         0.06   $         0.08
    Income (loss) from discontinued operations                        0.01            (0.14)             0.01            (0.36)
------------------------------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common stock                 $       0.03    $       (0.04)   $         0.07   $        (0.28)
==============================================================================================================================
</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 Nine Months
                                                                 Ended June 30,              Ended June 30,
                                                               2000          1999          2000          1999
=============================================================================================================================
<S>                                                           <C>              <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                            $    645,126     $   (460,040)     $  1,410,506    $ (2,147,072)
 Deduct: Net income (loss) from discontinued operations            250,000       (1,707,659)          250,000      (4,036,335)
-----------------------------------------------------------------------------------------------------------------------------
 Net income from continuing operations                             395,126        1,247,619         1,160,506       1,889,263
 Adjustment to reconcile net income to net cash used in
    operating activities:
        Depreciation and amortization                               61,287           38,131           211,768         130,389
        Gain on sale of fixed assets                                 7,094                -             4,768               -
            Issuance of common stock for payment of services             -           30,000           406,036          30,000
 Changes in operating assets:
    Restricted cash                                                      -         (144,809)          290,511           9,254
    Accounts receivable, net                                    (1,165,162)         215,360           173,896      (1,074,120)
    Inventory, net                                                  32,995         (156,942)          195,156         (94,389)
    Prepaid expenses and other                                     100,653           42,501            78,912             121
    Other noncurrent assets                                              -           (1,918)            1,816         (10,023)
    Accounts payable                                               114,133          338,006          (541,085)         324,653
    Accrued liabilities                                            194,739          (52,301)          (76,010)        (281,326)
------------------------------------------------------------------------------------------------------------------------------
  Net cash provided by (used in) operating activities of
   continuing operations                                          (259,135)       1,555,647         1,906,274          923,822
------------------------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from the sale of fixed assets                                  -                -             4,000                -
 Purchases of fixed assets                                         (46,455)         (15,381)          (59,545)         (71,260)
------------------------------------------------------------------------------------------------------------------------------
 Net cash used in investing activities of continuing
  operations                                                       (46,455)         (15,381)          (55,545)         (71,260)
------------------------------------------------------------------------------------------------------------------------------
 CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from issuance of debt to stockholders                          -                -                 -        2,000,000
 Draws (repayments) on revolving credit note, net                  387,032         (420,154)       (1,373,969)         934,187
 Payment of debt financing costs                                         -           50,000           149,554           82,752
 Proceeds from exercise of stock options and warrants                    -                -           108,333          496,250
 Proceeds from issuance of common stock                                  -                -         1,223,000                -
 (Payments)  proceeds on capital lease obligations                  (6,836)          (5,913)          (22,814)          63,432
------------------------------------------------------------------------------------------------------------------------------
  Net cash provided by (used in) financing activities
   of continuing operations                                        380,196         (376,067)           84,104        3,576,621
------------------------------------------------------------------------------------------------------------------------------
 Net cash used in discontinued operations                         (194,984)      (2,168,304)       (1,411,504)      (4,112,194)
------------------------------------------------------------------------------------------------------------------------------
 Net increase (decreased) in cash and cash equivalents            (120,378)      (1,004,105)          523,329          316,989
 Cash and cash equivalents, beginning of period                  1,328,656        1,560,540           684,949          239,446
------------------------------------------------------------------------------------------------------------------------------
 Cash and cash equivalents, end of period                     $  1,208,278     $    556,435      $  1,208,278    $     556,435
==============================================================================================================================
 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid for interest                                  $     20,759     $    146,139      $    209,478    $     308,648
      Interest received                                              3,385            2,408            10,374           12,935
 NON-CASH INVESTING AND FINANCING ACTIVITIES:
      Capital lease additions                                            -                -                 -        1,094,039
      Issuance of stock warrants and options for
       compensation                                                 10,684                -            23,277           75,000
      Issuance of stock warrants in connection with
       issuance of debt to stockholders                                  -                -                 -          461,538
      Preferred stock dividends paid in common stock                     -           33,279            55,315           85,047
      Preferred stock dividends accrued                                  -           30,235                 -          108,002
      Amortization of beneficial conversion feature on
       preferred stock                                                   -                -                 -          865,493
      Conversion of preferred stock to common stock                      -          203,498         1,831,482        1,383,787
==============================================================================================================================
</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
nine months ended June 30, 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
$930,278 as of June 30, 2000, which represents the Company's best estimate of
the remaining costs associated with the disposition of the discontinued
operations. This estimate reflects a reduction of $250,000 in the liabilities
for discontinued operations for an over accrual to a vendor directly related to
the discontinued operations. As a result, income from discontinued operations of
$250,000 is reflected in the earnings for the quarter ended June 30, 2000.

                                       6
<PAGE>

NOTE 3: CASH AND CASH EQUIVALENTS

     The Company invests its excess cash in money market funds, U.S. Treasury
obligations, and short-term debt instruments of U.S. corporations with strong
credit ratings. The Company has established guidelines with respect to the
diversification and maturities that maintain safety and liquidity. The Company
considers all highly liquid investments with an original maturity of three
months or less and money market funds to be cash equivalents.

NOTE 4:  INVENTORY

     Inventory consists of the following:

<TABLE>
<CAPTION>
                                           June 30,       September 30,
                                             2000             1999
              ========================================================
              <S>                         <C>             <C>
              Raw materials               $ 201,144          $ 297,252
              Work-in-process                30,244             21,648
              Finished goods                113,914            221,558
              ---------------------------------------------------------
              Total inventory             $ 345,302          $ 540,458
              ========================================================
</TABLE>

     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 5:  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 two dollars of debt, resulting in
the issuance of 1,000,000 stock warrants. Each warrant was exercisable into one
share of common stock beginning on December 1, 1998, at an exercise price of
$0.50 per share and increased to $1.00 per share after August 1, 1999. The
exercise price will increase to $2.00 per share after October 1, 2000. The
warrants expire on November 1, 2001. The Noteholders, as of June 30, 2000, were
issued 875,000 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.

     In connection with the placement and issuance of this debt, the Company
incurred costs of $21,000 and issued 50,000 stock warrants to the Company's
chairman of the board and 12,500 stock warrants to its external counsel. Each
warrant was exercisable into one share of common stock at $0.02 per share
beginning on December 1, 1998, and the warrants expire on November 1, 2001. As
of June 30, 2000, all of these warrants had been exercised for 62,500 shares of
common stock. These shares of common stock carry no registration rights. The
Company valued the warrants at $1.20 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.

     During the quarter ended March 31, 2000, all of the $2,000,000 in debt to
certain stockholders was converted to 4,000,000 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.


                                       7
<PAGE>

NOTE 6:  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
$4,000,000.

     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 $4.62 per share or a variable conversion
price. The Company valued this beneficial conversion feature at $1,403,509 and
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 charged to accumulated deficit as of the quarter ended March 31,
1999.

     As of March 31, 2000, the Company had converted all of the Series A Stock
into shares of Common Stock.

     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 June 30, 2000 and June 30, 1999, the Company paid dividends of $0 and
$33,279 by issuing 0 shares and 16,256 shares of Common Stock, respectively.

     Attached to the Series A Stock were warrants to purchase 100,000 shares of
Common Stock. As of June 30, 2000 there are 33,334 remaining warrants that are
currently exercisable at $6.00 per share and expire on June 30, 2002. The
Company valued the original warrants at $283,803 and reflected this amount in
additional paid-in capital during the year ended September 30, 1998.

NOTE 7:  STOCKHOLDERS' EQUITY

     At the Company's Annual Meeting of Stockholders on May 23, 2000, the
Company's stockholders approved a one-for-two reverse stock split of the
Company's Common Stock (the "Reverse Split") effective May 25, 2000. The Reverse
Split had no effect on the number of authorized shares of Common Stock,
preferred stock, or Series A Preferred Stock. Any stockholder otherwise entitled
to any fractional share interest due to the Reverse Split received in lieu
thereof, one additional share of Common Stock for the fractional share such
stockholder would have been entitled to as a result of the Reverse Split.

     The number of shares and per share amounts of the Company's Common Stock
set forth herein have been retroactively adjusted for all periods presented to
reflect the Reverse Split.

NOTE 8:  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 June 30, 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 June 30, 1999, potentially dilutive securities have not been
included in the diluted loss per common share calculation as they would have
been antidilutive. All Common Stock amounts and per share information have been
restated to reflect the Reverse Split for all periods presented. The following
table provides a reconciliation between net income (loss) and net income (loss)
applicable to common stockholders, and between basic and diluted shares
outstanding:


                                       8
<PAGE>
<TABLE>
<CAPTION>
                                          For the Three Months Ended        For the Nine Months Ended
                                                     June 30,                         June 30,
                                              2000              1999             2000           1999
========================================================================================================
<S>                                       <C>              <C>              <C>            <C>
 Net income (loss)                          $    645,126   $   (460,040)    $ 1,410,506    $ (2,147,072)
 Less-
      Series A Stock dividends                         -        (30,235)        (44,021)       (113,797)
      Amortization of the value of the
         beneficial conversion feature
         on the Series A Stock                         -              -                        (865,493)
--------------------------------------------------------------------------------------------------------
 Net income (loss) applicable to common
      stockholders (basic and diluted)      $    645,126   $   (490,275)    $ 1,366,485    $ (3,126,362)
========================================================================================================
 Weighted average number of common
      shares used in basic earning per
        share                                 24,022,358     11,909,811      18,074,184      11,327,989
 Effect of dilutive securities
       Stock Options                             485,500              -         485,500               -
       Warrants                                  443,334              -         443,334               -
========================================================================================================
  Weighted average number of common
       shares and dilutive potential
       Common Stock used in dilutive
       earning per share                      24,951,192     11,909,811      19,003,018      11,327,989
========================================================================================================
</TABLE>

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

<TABLE>
<CAPTION>
                                                                For the Three          For the Nine
                                                                 Months Ended          Months Ended
                                                                June 30, 2000          June 30, 2000
                                                              ======================================
              <S>                                             <C>                 <C>
              Diluted earnings per share:
                 Income from continuing operations
                   applicable to common stockholders           $      395,126         $    1,116,485
                Income impact of assumed conversions:
                  Series A Stock dividends                                  -                 44,021
                                                              --------------------------------------
                Income from continuing operations
                  applicable after assumed conversion
                  of dilutive securities                              395,126              1,160,506
                Income from discontinued
                  operations                                          250,000                250,000
                                                              --------------------------------------
                Net income applicable to common
                  stockholders after assumed conversion of
                  dilutive securities                          $      645,126         $    1,410,506
                                                              ======================================
</TABLE>

                                       9
<PAGE>

NOTE 9:  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 Nine Months Ended
                                                    June 30,                          June 30,
                                               2000               1999         2000             1999
========================================================================================================
<S>                                        <C>             <C>              <C>           <C>
 Net income (loss), as reported            $    645,126    $   (460,040)    $ 1,410,506   $ (2,147,072)
 Foreign currency translation
  adjustment                                          -         (34,982)              -        (51,880)
--------------------------------------------------------------------------------------------------------
 Comprehensive income (loss)               $    645,126    $   (495,022)    $ 1,410,506   $ (2,198,952)
========================================================================================================
</TABLE>

     The adoption of this standard had no net effect on the Company's net income
(loss) or stockholders' equity for the three months and nine months ended June
30, 2000 and 1999. Prior year financial statements have been reclassified to
conform to the requirements of this standard.

NOTE 10:  SUBSEQUENT EVENT(S)

     None.

                                       10
<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
June 30, 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 on 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 June 30, 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.

                                       11
<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 nine months ended June 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                       For the Three          For the Nine
                                                       Months Ended           Months Ended
                                                        June 30,               June 30,
                                                     2000      1999         2000      1999
 ======================================================================   ==================
  <S>                                               <C>        <C>        <C>         <C>
  Net sales                                           100.0%     100.0%     100.0%   100.0%
  Cost of goods sold                                   34.3%      29.1%      34.8%    37.8%
 ----------------------------------------------------------------------   -------------------
  Gross profit                                         65.7%      70.9%      65.2%    62.2%
 ----------------------------------------------------------------------   -------------------
  Operating expenses:
               Research and development                25.6%      12.2%      21.2%    14.4%
               Sales and marketing                     15.7%      12.3%      15.6%    14.1%
               General and administrative               7.6%       5.3%       7.9%     6.2%
               Depreciation and amortization            1.1%       1.1%       1.6%     1.5%
 ----------------------------------------------------------------------   -------------------
                        Total operating expenses       49.9%      30.9%      46.4%    36.1%
 ----------------------------------------------------------------------   -------------------
  Operating income                                     15.7%      39.9%      18.8%    26.1%
 ----------------------------------------------------------------------   -------------------
  Other income (expense):
               Interest income                          0.3%       0.2%       0.2%     0.2%
               Interest expense                        (0.7%)    (3.2%)      (3.4%)   (3.3%)
               Other income                             1.0%       0.1%       2.3%     0.0%
 ----------------------------------------------------------------------   -------------------
  Net income before discontinued operations            16.3%      37.0%      17.9%    23.0%
 ----------------------------------------------------------------------   -------------------
    Income (loss) from discontinued operations         10.3%     (50.7%)      3.9%   (49.1%)
 ----------------------------------------------------------------------   -------------------
    Net Income (loss)                                  26.5%     (13.7%)     21.7%   (26.1%)
 ======================================================================   ===================
</TABLE>

Net Sales

     Net sales consist of memory module test systems, less returns and
discounts. Net sales decreased to $2,430,272 in the third quarter of fiscal 2000
from $3,368,000 in the same period of fiscal 1999. The quarter ended June 30,
1999 was an exceptional quarter for sales due to the introduction of the SIGMA.3
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 increased $385,322 for
the quarter ended June 30, 2000 when compared to the quarter ended March 31,
2000. 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 $2,386,293 in the
third quarter of fiscal 1999 to $1,596,069 in the third quarter of fiscal 2000
due primarily to the revenue decrease for the same period. Gross profit as a
percent of sales decreased to 65.7% in the third fiscal quarter of 2000 from
70.9% in the third fiscal quarter of 1999. The decrease in gross profit margin
was due in large to the mix of products sold as well as the decline in revenues.

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 $621,632 in the third quarter of fiscal 2000 from $412,065 in the third
quarter of fiscal 1999, representing an increase of 50.9%. 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.

                                       12
<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 $380,342 in the third fiscal quarter of 2000 from $412,969 in the
same period of fiscal 1999. Sales and marketing expenses expressed as a
percentage of revenues in the third quarter of fiscal 2000 and 1999 were 15.7%
and 12.3%, respectively. The decrease in sales and marketing expenses is
attributable to additional expenses that were focused on introducing the
DarkHorse SIGMA.3 memory module test system in the quarter ended June 30, 1999,
as well as larger sales commissions that were paid due to higher revenue for the
third fiscal quarter of 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 third quarter of
fiscal 2000 increased 3.6%, or $6,371, to $185,655 from $179,284 for the same
quarter of fiscal 1999. When expressed as a percentage of sales, general and
administrative expenses increased from 5.3% in the third quarter of fiscal 1999
to 7.6% in the same quarter of fiscal 2000 primarily due to the higher revenue
in the third fiscal quarter of 1999. 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 $26,273 in the third quarter of fiscal 2000 from $36,799 in the
same quarter of fiscal 1999. This decrease was due to the declining depreciable
basis of the Company's fixed assets.

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 $12,960 of income in the third quarter of fiscal
2000 from ($97,557) of expense in the third quarter of fiscal 1999. The increase
in other income (expense) is primarily due to an increase in non-recurring
miscellaneous income and the reduction of interest expense.

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 third quarter of fiscal 2000, the Company utilized $259,135 of
cash in its continuing operations associated primarily with the increase in
accounts receivable of $1,165,162. The vast majority of the Company's accounts
receivable is with strong companies in the memory module business. The Company's
financing activities generated $380,196 due to an increase in its revolving
credit line. The Company had $1,208,278 in cash and working capital of $859,471
at June 30, 2000, an increase in working capital of $687,641 from the prior
fiscal quarter ended March 31, 2000.

                                       13
<PAGE>

Significant Customer Concentration

     A significant percentage of the Company's net sales is produced by a
relatively small number of customers. In the third quarter of fiscal 2000, the
ten largest customers accounted for approximately 98% of net sales compared to
approximately 94% in the same period in fiscal 1999. Two customers represented
57% and 19% of sales, respectively, in the third quarter of fiscal 2000; the
customer that represented 57% of sales in the third quarter of fiscal 2000
represented only 5% 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

     Fourteen 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 effective
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 effective November 30, 1999, whose jobs were no longer needed at All
Components, Inc. or the Company. The plaintiffs' original request for a class
action lawsuit has been denied by the court. The Company complied with the WARN
Act and is actively defending its position.

     Under the terms of a lease agreement between Tanisys (Europe), Ltd. and
Akeler, Ltd., the Company guaranteed the payment of rent on the manufacturing
facility located in Scotland in the approximate amount of $200,000 per year. On
December 9, 1999, the Company sold its memory module manufacturing business,
including all of the common stock of Tanisys (Europe), Ltd. Subsequently,
Tanisys (Europe), Ltd. defaulted on the lease payment and demand has been made
by the landlord upon the Company to bring the rent current. The Company has
refused to do so. The Company is unable at this time to determine the outcome of
any lawsuit that might be filed against the Company. There can be no assurance
that the resolution of this claim or any future proceeding would not have an
adverse material effect on the Company's results of operations or the fiscal
period in which such resolution occurred.

     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.

                                       14
<PAGE>

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

     At the Annual Meeting of Stockholders held on May 23, 2000, the following
matters were adopted by the margins indicated below, and additional information
can be obtained from the Company's Proxy Statement filed on April 3, 2000. All
share amounts have been restated to reflect the Reverse Split.

     1.   To ratify the sale of certain assets and the assumption of certain
liabilities related to the Company's memory module manufacturing business and
the sale of stock of the Company's wholly owned subsidiary, Tanisys (Europe)
Ltd., to Tanisys Operations, LP, pursuant to an Asset Purchase Agreement dated
December 9, 1999.

                  For:                     12,767,205
                  Against:                     40,886
                  Abstentions:                107,256
                  Broker non-votes:         7,254,299

     2.   To amend the Articles of Continuance of the Company to effect a one-
for-two reverse stock split.

                  For:                      19,646,349
                  Against:                     473,494
                  Abstentions:                  49,804
                  Broker non-votes:                  0


     3.   To ratify the appointment of Brown, Graham and Company, P.C. as
independent public accountants of the Company for the fiscal year ending
September 30, 2000.

                  For:                      20,032,238
                  Against:                      29,128
                  Abstentions:                 108,280
                  Broker non-votes:                  0


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 May 23, 2000, and filed May 25, 2000, reporting an
     amendment to the Company's Articles of Continuance to effect a reverse
     split of the Company's Common Stock, no par value, on the basis of one
     share for each two currently issued shares effective at the opening of
     business on May 25, 2000.

Items 2, 3 and 5 are not applicable and have been omitted.

                                       15
<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:    August 14, 2000              By:  /s/ CHARLES T. COMISO
                                         -----------------------
                                      Charles T. Comiso
                                      Chief Executive Officer,
                                      President and Director

Date:    August 14, 2000              By:  /s/ TERRY W. REYNOLDS
                                         -----------------------
                                      Terry W. Reynolds
                                      Vice President of Finance
                                      (Duly authorized and Principal
                                      Accounting Officer)

                                       16